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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017 |
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Ohio
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34-1566328
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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777 Goodale Boulevard, Suite 100
Columbus, Ohio
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43212
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(Address of principal executive office)
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(Zip Code)
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Title of Each Class
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Name of each Exchange on Which Registered
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Common Shares, no par value per share
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NASDAQ Global Select Market
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Large accelerated filer
¨
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Accelerated filer
x
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Non-accelerated filer
¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Emerging growth company
¨
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Item
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Page
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1
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1A.
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1B.
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2
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3
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4
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5
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6
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7
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7A.
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8
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9
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9A.
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9B.
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10
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11
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12
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13
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14
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15
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16
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•
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the success of our existing and new restaurants;
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•
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our ability to successfully develop and expand our operations;
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•
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changes in economic conditions, including continuing effects from the recent recession;
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•
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damage to our reputation or lack of acceptance of our brands;
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•
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economic and other trends and developments, including adverse weather conditions, in those local or regional areas in which our restaurants are concentrated;
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•
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the impact of economic factors, including the availability of credit, on our landlords and other retail center tenants;
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•
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changes in availability or cost of our principal food products;
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•
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increases in our labor costs, including as a result of changes in government regulation;
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•
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labor shortages or increased labor costs;
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•
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increasing competition in the restaurant industry in general as well as in the dining segments of the restaurant industry in which we compete;
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•
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future asset impairment charges;
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•
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changes in attitudes or negative publicity regarding food safety and health concerns;
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•
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potential fluctuations in our quarterly operating results due to new restaurant openings and other factors;
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•
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the loss of key members of our management team;
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•
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strain on our infrastructure and resources caused by our growth;
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•
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the impact of federal, state or local government regulations, and the potential impact of litigation, relating to building construction and the opening of new restaurants, our existing restaurants, our employees, the sale of alcoholic beverages and the sale or preparation of food;
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•
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the success of our marketing programs;
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•
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our inability to obtain adequate levels of insurance coverage;
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•
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the impact of our indebtedness;
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•
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our lack of liquidity materially adversely affecting our ability to continue as a going concern;
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•
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our ability to satisfy our debt obligations, including our ability to repay our existing debt at maturity, and to operate in compliance with our financing agreements;
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•
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the effect on existing restaurants of opening new restaurants in the same markets;
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•
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security breaches of confidential guest information;
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•
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inadequate protection of our intellectual property;
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•
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the failure or breach of our information technology systems;
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•
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a major natural or man-made disaster at our corporate facility;
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•
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our ability to maintain adequate internal controls over financial reporting;
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•
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the impact of federal, state and local tax rules; and
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•
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other factors discussed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including factors discussed under the headings “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this annual report on Form 10-K.
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•
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Offer Italian Food and Wines.
We seek to differentiate ourselves from other multi-location restaurants by offering affordable cuisine prepared using fresh ingredients and authentic Italian cooking methods. To ensure that the menu is consistently prepared to our high standards, we have developed a comprehensive eight week management training program. As part of their skill preparation, all of our executive chefs perform a cooking demonstration. This enables our Corporate Executive Chefs to evaluate a candidate’s skill set. All executive chefs are required to complete eight weeks of kitchen training, including mastering all stations, ordering, receiving and inventory control. Due to our high average unit volumes, the executive chefs are trained throughout the eight weeks to ensure that their food is consistently prepared on a timely basis. In addition, all executive chefs are trained on product and labor management programs to achieve maximum efficiencies. Both of these tools reinforce our commitment to training our employees to run their business from a profit and loss perspective, as well as from the culinary side. We offer made-to-order menu items prepared using traditional Italian culinary techniques with an emphasis on fresh ingredients and authentic recipes. Our food menu is complemented by a wine list that offers both familiar varieties as well as wines exclusive to our restaurants. An attention to detail, culinary expertise and focused execution reflects our chef-driven culture. Each brand’s menu has its own distinctive flavor profile, with BRAVO! favoring the more classic Italian cuisine that includes a variety of pasta dishes and pizzas and BRIO favoring a broader selection of premium steaks, chops, seafood, flatbreads, bruschettas and pastas. All of our new menu items are developed by our Corporate Executive Chefs through a six month ideation process designed to meet our high standards of quality and exceed our guests’ expectations.
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•
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Deliver Superior Guest Service.
We are committed to delivering superior service to each guest, at each meal, each and every day. Significant time and resources are spent in the development and implementation of our training programs, resulting in a comprehensive service system for both hourly service people and management. We offer guests prompt, friendly and efficient service, keeping wait staff-to-table ratios high, and staffing each restaurant with experienced “on the floor” management teams to ensure consistent and attentive guest service. We employ server assistants to ensure prompt delivery of fresh dishes at the appropriate temperature, thus allowing the wait staff to focus on overall guest satisfaction. All service personnel are trained in the specific flavors of each dish. Using an understanding of our menu, the servers assist guests in selecting menu items complementing individual preferences. Only trained, experienced chefs and culinary staff are hired and allowed to operate in the kitchen. Best-in-class service standards are designed to ensure satisfied guests and attract both new and repeat guest traffic.
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•
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Leverage Our Partnership Management Philosophy.
A key element to our expansion and success has been the development of our partnership management philosophy, which is based on the premise that active and ongoing economic participation (via a bonus plan) by each restaurant’s general manager, executive chef, assistant managers and sous chefs is essential to long-term success. The purpose of this structure is to attract and retain an experienced management team, incentivize the team to execute our strategy and objectives and provide stability to the operating management team. This program is offered to all restaurant management personnel. This provides our management team with the financial incentive to develop people, build lifelong guests and operate their restaurants in accordance with our standards.
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•
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declining economic conditions, including housing market downturns, rising unemployment rates, lower disposable income and consumer confidence and other events or factors that adversely affect consumer spending in the markets we serve;
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•
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increased competition (both in the upscale affordable dining segment and in other segments of the restaurant industry);
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•
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changes in consumer preferences;
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•
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guests’ budgeting constraints, which may cause them to not order certain high-margin items such as desserts and beverages (both alcoholic and non-alcoholic);
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•
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guests’ failure to accept menu price increases that we may make to offset increases in key operating expenses;
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•
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inclement weather and weather-related restaurant closures;
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•
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our reputation and consumer perception of our concepts’ offerings in terms of quality, price, value and service; and
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•
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guest experiences from dining in our restaurants.
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•
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food and other raw materials costs, many of which we may not or cannot effectively hedge;
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•
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labor costs, including wage, workers’ compensation, health care and other benefits expenses;
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•
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rent expenses and other costs under leases for our new and existing restaurants;
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•
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energy, water and other utility costs;
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•
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costs for insurance (including property, liability and workers’ compensation);
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•
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information technology and other logistical costs; and
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•
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expenses due to litigation against us.
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•
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our inability to generate sufficient funds from operations or to obtain favorable financing to support our development;
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•
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identification and availability of, and competition for, high quality locations that will continue to drive high levels of sales per unit;
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•
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acceptable lease arrangements, including sufficient levels of tenant allowances and construction contributions;
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•
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the financial viability of our landlords, including the availability of financing for our landlords;
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•
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construction and development cost management;
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•
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timely delivery of the leased premises to us from our landlords and punctual commencement of build-out construction activities;
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•
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delays due to the highly customized nature of our restaurant concepts and the complex design, construction and pre-opening processes for each new location;
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•
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obtaining all necessary governmental licenses and permits on a timely basis to construct and operate our restaurants;
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•
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competition in new markets;
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•
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unforeseen engineering or environmental problems with the leased premises;
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•
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adverse weather conditions during the construction period;
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•
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unanticipated commercial, residential and infrastructure development near our new restaurants;
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•
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recruitment of qualified managers, chefs and other key operating personnel; and
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•
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other unanticipated increases in costs, any of which could give rise to delays or cost overruns.
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•
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requires us to utilize a portion of our cash flow from operations for payments on our indebtedness, reducing the availability of our cash flow to fund working capital, capital expenditures, development activity and other general corporate purposes;
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•
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increases our vulnerability to adverse general economic or industry conditions;
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•
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makes us more vulnerable to increases in interest rates, as borrowings under our revolving credit facility are at variable rates;
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•
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limits our ability to obtain additional financing in the future for working capital or other purposes; and
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•
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places us at a competitive disadvantage compared to our competitors that have less indebtedness.
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•
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our quarterly or annual earnings or those of other companies in our industry;
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•
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changes in laws or regulations, or new interpretations or applications of laws and regulations, that are applicable to our business;
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•
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the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
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•
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changes in accounting standards, policies, guidance, interpretations or principles;
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•
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changes in our senior management personnel;
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•
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sales of common shares by our directors and executive officers;
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•
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adverse market reaction to any indebtedness we may incur or securities we may issue in the future;
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•
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actions by shareholders;
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•
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the level and quality of research analyst coverage for our common shares, changes in financial estimates or investment recommendations by securities analysts following our business or failure to meet such estimates;
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•
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the financial disclosure we may provide to the public, any changes in such disclosure or our failure to meet such disclosure;
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•
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various market factors or perceived market factors, including rumors, whether or not correct, involving us, our distributors or suppliers or our competitors;
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•
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introductions of new offerings or new pricing policies by us or by our competitors;
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•
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acquisitions or strategic alliances by us or our competitors;
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•
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short sales, hedging and other derivative transactions in our common shares;
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•
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the operating and stock price performance of other companies that investors may deem comparable to us; and
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•
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other events or factors, including changes in general conditions in the United States and global economies or financial markets (including those resulting from Acts of God, war, incidents of terrorism or responses to such events).
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•
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advance notice requirements for shareholders proposals and nominations;
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•
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availability of “blank check” preferred shares;
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•
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establishment of a classified board of directors so that not all members of our board of directors are elected at one time;
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•
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the right of the board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or due to the resignation or departure of an existing board member;
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•
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the prohibition of cumulative voting in the election of directors, which would otherwise allow less than a majority of shareholders to elect director candidates; and
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•
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limitations on the removal of directors.
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Location
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Bravo
Restaurants
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Brio
Restaurants
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Total
Number of
Restaurants
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|||
Alabama
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1
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1
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2
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Arizona
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2
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|
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2
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|
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Arkansas
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1
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1
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California
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|
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3
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|
|
3
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|
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Colorado
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|
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2
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|
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2
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Connecticut
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|
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2
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2
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Delaware
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1
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|
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1
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Florida
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3
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|
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15
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|
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18
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|
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Illinois
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1
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|
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1
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|
|
2
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|
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Indiana
|
2
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|
|
|
|
2
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|
|
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Iowa
|
1
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|
|
|
|
1
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|
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Kansas
|
1
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|
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|
|
1
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|
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Kentucky
|
1
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|
|
1
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|
|
2
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|
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Louisiana
|
1
|
|
|
|
|
1
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|
|
|
Maryland
|
|
|
2
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|
|
2
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|
|
|
Massachusetts
|
|
|
|
1
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|
|
1
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|
|
Michigan
|
5
|
|
|
2
|
|
|
7
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|
|
Missouri
|
2
|
|
|
2
|
|
|
4
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|
|
Nebraska
|
1
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|
|
|
|
1
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|
|
|
Nevada
|
1
|
|
|
2
|
|
|
3
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|
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New Jersey
|
|
|
5
|
|
|
5
|
|
|
|
New Mexico
|
1
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|
|
|
|
1
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|
|
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New York
|
1
|
|
|
1
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|
|
2
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|
|
North Carolina
|
2
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|
|
3
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|
*
|
5
|
|
*
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Ohio
|
12
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|
|
8
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|
|
20
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|
|
Oklahoma
|
1
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|
|
|
|
1
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|
|
|
Pennsylvania
|
6
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|
|
|
|
6
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|
|
|
Puerto Rico
|
—
|
|
|
1
|
|
^
|
1
|
|
^
|
Tennessee
|
1
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|
|
|
|
1
|
|
|
|
Texas
|
1
|
|
|
5
|
|
|
6
|
|
|
Utah
|
|
|
2
|
|
|
2
|
|
|
|
Virginia
|
2
|
|
|
3
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|
|
5
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|
|
Wisconsin
|
1
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|
|
|
|
1
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|
|
|
Total
|
49
|
|
|
65
|
|
|
114
|
|
|
*
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Includes one location that we operate pursuant to a management agreement and do not own.
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^
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Includes one location operated under a franchise agreement.
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Item 5.
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Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.
|
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High
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Low
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||||
Fiscal 2017 Quarter Ended
|
|
|
|
||||
March 26, 2017
|
$
|
5.00
|
|
|
$
|
3.60
|
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June 25, 2017
|
$
|
5.30
|
|
|
$
|
4.50
|
|
September 24, 2017
|
$
|
4.65
|
|
|
$
|
2.30
|
|
December 31, 2017
|
$
|
2.85
|
|
|
$
|
1.85
|
|
|
|
|
|
||||
Fiscal 2016 Quarter Ended
|
|
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|
||||
March 27, 2016
|
$
|
9.14
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|
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$
|
7.05
|
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June 26, 2016
|
$
|
8.17
|
|
|
$
|
6.66
|
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September 25, 2016
|
$
|
8.56
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|
|
$
|
4.38
|
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December 25, 2016
|
$
|
5.00
|
|
|
$
|
3.53
|
|
|
12/30/2012
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12/29/2013
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12/28/2014
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12/27/2015
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12/25/2016
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12/31/2017
|
||||||||||||
Bravo Brio Restaurant Group, Inc.
|
$
|
100.00
|
|
$
|
104.90
|
|
$
|
81.73
|
|
$
|
56.81
|
|
$
|
25.11
|
|
$
|
18.97
|
|
NASDAQ Composite
®
(US) Index
|
$
|
100.00
|
|
$
|
158.73
|
|
$
|
183.57
|
|
$
|
192.79
|
|
$
|
208.61
|
|
$
|
233.20
|
|
Nation’s Restaurant News Stock Index
|
$
|
100.00
|
|
$
|
129.50
|
|
$
|
132.85
|
|
$
|
152.01
|
|
$
|
155.26
|
|
$
|
182.77
|
|
|
Fiscal Year(1)
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
407,607
|
|
|
$
|
410,254
|
|
|
$
|
423,994
|
|
|
$
|
408,309
|
|
|
$
|
411,091
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
104,890
|
|
|
106,910
|
|
|
106,942
|
|
|
107,078
|
|
|
105,628
|
|
|||||
Labor
|
151,424
|
|
|
151,797
|
|
|
151,893
|
|
|
144,848
|
|
|
143,097
|
|
|||||
Operating
|
66,405
|
|
|
67,334
|
|
|
69,568
|
|
|
65,851
|
|
|
64,970
|
|
|||||
Occupancy
|
31,439
|
|
|
32,059
|
|
|
32,226
|
|
|
29,013
|
|
|
28,506
|
|
|||||
General and administrative expenses
|
29,381
|
|
|
28,562
|
|
|
24,520
|
|
|
22,575
|
|
|
22,697
|
|
|||||
Restaurant pre-opening costs
|
411
|
|
|
1,038
|
|
|
3,009
|
|
|
3,204
|
|
|
3,560
|
|
|||||
Asset impairment charges
|
11,215
|
|
|
15,409
|
|
|
10,201
|
|
|
—
|
|
|
14,196
|
|
|||||
Depreciation and amortization
|
21,133
|
|
|
22,324
|
|
|
22,435
|
|
|
20,288
|
|
|
20,019
|
|
|||||
Total costs and expenses
|
416,298
|
|
|
425,433
|
|
|
420,794
|
|
|
392,857
|
|
|
402,673
|
|
|||||
(Loss) Income from operations
|
(8,691
|
)
|
|
(15,179
|
)
|
|
3,200
|
|
|
15,452
|
|
|
8,418
|
|
|||||
Interest expense, net
|
2,464
|
|
|
1,703
|
|
|
1,484
|
|
|
1,347
|
|
|
1,143
|
|
|||||
(Loss) Income before income taxes
|
(11,155
|
)
|
|
(16,882
|
)
|
|
1,716
|
|
|
14,105
|
|
|
7,275
|
|
|||||
Income tax (benefit) expense
|
(1,386
|
)
|
|
57,833
|
|
|
(2,864
|
)
|
|
2,283
|
|
|
(268
|
)
|
|||||
Net (loss) income
|
$
|
(9,769
|
)
|
|
$
|
(74,715
|
)
|
|
$
|
4,580
|
|
|
$
|
11,822
|
|
|
$
|
7,543
|
|
Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.64
|
)
|
|
$
|
(5.09
|
)
|
|
$
|
0.30
|
|
|
$
|
0.63
|
|
|
$
|
0.39
|
|
Diluted
|
$
|
(0.64
|
)
|
|
$
|
(5.09
|
)
|
|
$
|
0.29
|
|
|
$
|
0.60
|
|
|
$
|
0.37
|
|
Weighted average shares outstanding —
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
15,173
|
|
|
14,680
|
|
|
15,143
|
|
|
18,863
|
|
|
19,542
|
|
|||||
Diluted
|
15,173
|
|
|
14,680
|
|
|
15,865
|
|
|
19,701
|
|
|
20,432
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (at the end of the period)
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
393
|
|
|
$
|
444
|
|
|
$
|
447
|
|
|
$
|
427
|
|
|
$
|
7,640
|
|
Working capital (deficit)
|
(88,161
|
)
|
|
(55,534
|
)
|
|
(51,738
|
)
|
|
(41,801
|
)
|
|
(26,204
|
)
|
|||||
Total assets
|
142,167
|
|
|
166,762
|
|
|
248,060
|
|
|
251,763
|
|
|
254,852
|
|
|||||
Total debt
|
38,500
|
|
|
41,500
|
|
|
43,300
|
|
|
56,000
|
|
|
15,693
|
|
|||||
Total shareholders’ equity (deficiency in assets)
|
(30,329
|
)
|
|
(21,530
|
)
|
|
54,824
|
|
|
53,784
|
|
|
103,776
|
|
(1)
|
We utilize a 52- or 53-week accounting period which ends on the last Sunday of the calendar year. With the exception of 2017, which was a 53-week year, each of the above fiscal years had 52 weeks.
|
|
Fiscal Year
|
||||||
|
2017
|
|
2016
|
||||
Net (loss) income
|
$
|
(9,769
|
)
|
|
$
|
(74,715
|
)
|
Impact from:
|
|
|
|
||||
Asset impairment charges (1)
|
11,215
|
|
|
15,409
|
|
||
Litigation reserves (2)
|
2,960
|
|
|
465
|
|
||
Write-off of unamortized loan origination fees
|
69
|
|
|
89
|
|
||
Valuation allowance on deferred tax assets (3)
|
—
|
|
|
64,682
|
|
||
Tax expense related to an IRS audit settlement
|
—
|
|
|
265
|
|
||
Tax expense from excess tax deficiency for option exercises
|
—
|
|
|
2,395
|
|
||
Impact of new tax legislation (4)
|
(1,086
|
)
|
|
—
|
|
||
Income tax expense (5)
|
—
|
|
|
(6,060
|
)
|
||
Adjusted net income
|
$
|
3,389
|
|
|
$
|
2,530
|
|
|
Basic
|
||||||
|
2017
|
|
2016
|
||||
Net (loss) income per share
|
$
|
(0.64
|
)
|
|
$
|
(5.09
|
)
|
Impact from:
|
|
|
|
||||
Asset impairment charges (1)
|
0.74
|
|
|
1.05
|
|
||
Litigation reserves (2)
|
0.19
|
|
|
0.03
|
|
||
Write-off of unamortized loan origination fees
|
—
|
|
|
0.01
|
|
||
Valuation allowance on deferred tax assets (3)
|
—
|
|
|
4.41
|
|
||
Tax expense related to an IRS audit settlement
|
—
|
|
|
0.02
|
|
||
Tax expense from excess tax deficiency for option exercises
|
—
|
|
|
0.16
|
|
||
Impact of new tax legislation (4)
|
(0.07
|
)
|
|
—
|
|
||
Income tax expense (5)
|
—
|
|
|
(0.41
|
)
|
||
Adjusted net income per share
|
$
|
0.22
|
|
|
$
|
0.18
|
|
Weighted average shares outstanding — basic
|
15,173
|
|
|
14,680
|
|
|
Diluted
|
||||||
|
2017
|
|
2016
|
||||
Net (loss) income per share (6)
|
$
|
(0.64
|
)
|
|
$
|
(4.88
|
)
|
Impact from:
|
|
|
|
||||
Asset impairment charges (1)
|
0.74
|
|
|
1.01
|
|
||
Litigation reserves (2)
|
0.19
|
|
|
0.03
|
|
||
Write-off of unamortized loan origination fees
|
—
|
|
|
0.01
|
|
||
Valuation allowance on deferred tax assets (3)
|
—
|
|
|
4.22
|
|
||
Tax expense related to an IRS audit settlement
|
—
|
|
|
0.02
|
|
||
Tax expense from excess tax deficiency for option exercises
|
—
|
|
|
0.16
|
|
||
Impact of new tax legislation (4)
|
(0.07
|
)
|
|
—
|
|
||
Income tax expense (5)
|
—
|
|
|
(0.40
|
)
|
||
Adjusted net income per share
|
$
|
0.22
|
|
|
$
|
0.17
|
|
Weighted average shares outstanding — diluted (7)
|
15,206
|
|
|
15,319
|
|
1)
|
See
Note 1
of Notes to Consolidated Financial Statements in Part IV, Item 15 of this annual report for information regarding asset impairment charges incurred during the years ended
December 31, 2017
and
December 25, 2016
.
|
2)
|
See
Note 13
of Notes to Consolidated Financial Statements in Part IV, Item 15 of this annual report for information regarding litigation reserves recorded during the year ended
December 31, 2017
.
|
3)
|
See
Note 12
of Notes to Consolidated Financial Statements in Part IV, Item 15 of this annual report for information regarding the valuation allowance recorded during the year ended
December 31, 2017
.
|
4)
|
Reflects the net impact of applying the provisions of the Tax Cuts and Jobs Act of 2017 enacted on December 22, 2017 on the Company's deferred tax assets and the associated valuation allowance.
|
5)
|
Reflects the adjustments for income taxes related to asset impairment charges and the accrued liability for current litigation. The effective tax rate for fiscal year 2017 is zero.
|
6)
|
For purposes of reconciling net loss per share — diluted to its corresponding adjusted measure, we calculated net loss per share — diluted using the same weighted average shares outstanding used to determine adjusted net income per share — diluted. In periods where the Company incurred a net loss, GAAP requires that all stock options and unvested shares of restricted stock are considered anti-dilutive and not included in that period's diluted weighted average shares outstanding.
|
7)
|
Diluted weighted average shares outstanding includes potentially issuable common shares. Shares of common stock equivalents of 357,361 and 65,748 were excluded from the diluted calculation due to their anti-dilutive effect for the fiscal years ended
December 31, 2017
and
December 25, 2016
, respectively.
|
•
|
Comparable Restaurants and Comparable Restaurant Sales
. We consider a restaurant to be comparable in the first full quarter following the eighteenth month of operations. Changes in comparable restaurant sales reflect changes in sales for the comparable group of restaurants over a specified period of time. Changes in comparable restaurant sales reflect changes in guest count trends as well as changes in average check.
|
•
|
Average Check.
Average check is calculated by dividing restaurant revenues by guest counts for a given time period. Average check reflects menu price influences as well as changes in menu mix. Management uses this indicator to analyze trends in guest preferences, effectiveness of menu changes and price increases and per guest expenditures.
|
•
|
Average Unit Volume.
Average unit volume consists of the average sales of our restaurants over a certain period of time. This measure is calculated by dividing total restaurant revenues within a period by the number of weeks in the relevant period. This indicator assists management in measuring changes in guest traffic, pricing and development of our brands.
|
•
|
Restaurant Level Operating Margins.
Restaurant level operating margin is revenues minus costs of sales, labor costs, operating expenses and occupancy costs. Management uses this measure to evaluate performance at our restaurants and determine the flow through of additional revenues to net (loss) income.
|
•
|
Operating Margin.
Operating margin represents income from operations before interest and taxes as a percentage of our revenues. By monitoring and controlling our operating margins, we can gauge the overall profitability of our company.
|
|
Year Ended
|
||||||||||
|
December 31, 2017
|
|
December 25, 2016
|
|
December 27, 2015
|
||||||
|
(in thousands)
|
||||||||||
Net cash provided by operating activities
|
$
|
12,507
|
|
|
$
|
20,350
|
|
|
$
|
42,230
|
|
Net cash used in investing activities
|
(9,276
|
)
|
|
(15,512
|
)
|
|
(24,605
|
)
|
|||
Net cash used in financing activities
|
(3,282
|
)
|
|
(4,841
|
)
|
|
(17,605
|
)
|
|||
Net decrease in cash and cash equivalents
|
(51
|
)
|
|
(3
|
)
|
|
20
|
|
|||
Cash and cash equivalents at beginning of year
|
444
|
|
|
447
|
|
|
427
|
|
|||
Cash and cash equivalents at end of year
|
$
|
393
|
|
|
$
|
444
|
|
|
$
|
447
|
|
|
Payments Due by Year
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
After 2022
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Term loan facility (1)
|
$
|
30,000
|
|
|
$
|
30,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Revolving credit facility (1)
|
8,500
|
|
|
8,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
217,716
|
|
|
28,442
|
|
|
55,907
|
|
|
50,361
|
|
|
83,006
|
|
|||||
Construction purchase obligations
|
490
|
|
|
490
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
256,706
|
|
|
$
|
67,432
|
|
|
$
|
55,907
|
|
|
$
|
50,361
|
|
|
$
|
83,006
|
|
(1)
|
The outstanding balance on our term loan and revolving credit facility is due on December 1, 2018. Interest payments on our variable-rate term loan facility have been excluded from the amounts shown above, primarily because the balances outstanding can fluctuate periodically.
|
Class II
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Positions and Offices Held with the Company
|
|
Director Since
|
Alton F. Doody III
|
|
59
|
|
Founder and Chairman of the Board
|
|
1987
|
David B. Pittaway
|
|
66
|
|
Director
|
|
2006
|
Harold O. Rosser II
|
|
69
|
|
Director
|
|
2006
|
Fortunato N. Valenti
|
|
70
|
|
Director
|
|
2010
|
Class I
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Positions and Offices Held with the Company
|
|
Director Since
|
Thomas J. Baldwin
|
|
62
|
|
Director
|
|
2012
|
James S. Gulmi
|
|
71
|
|
Director
|
|
2010
|
Brian T. O'Malley
|
|
50
|
|
Director, President and Chief Executive Officer
|
|
2015
|
|
Name
|
|
Position Held With the Company
|
|
Age
|
|
Executive Officer Since
|
|
Brian T. O'Malley
|
|
Director, President and Chief Executive Officer
|
|
50
|
|
2006
|
|
Diane D. Reed
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
59
|
|
2017
|
|
Khanh Collins
|
|
Senior Vice President and Chief Operating Officer
|
|
54
|
|
2015
|
•
|
serve as an independent and objective party to monitor our financial reporting process and internal control systems;
|
•
|
review and appraise the audit efforts of our independent registered public accountants and exercise ultimate authority over the relationship between us and our independent registered public accountants; and
|
•
|
provide an open avenue of communication among the independent registered public accountants, financial and senior management and the Board of Directors.
|
•
|
identifies individuals qualified to serve as our directors;
|
•
|
nominates qualified individuals for election to our Board of Directors at annual meetings of shareholders;
|
•
|
establishes a policy for considering shareholder nominees for election to our Board of Directors; and
|
•
|
recommends to our Board the directors to serve on each of our Board committees.
|
•
|
has the sole authority to retain and terminate any compensation consultant used to assist us, the Board of Directors or the Compensation Committee in the evaluation of the compensation of our executive officers and directors;
|
•
|
annually reviews and determines corporate goals and objectives to serve as the basis for the compensation of our executive officers, evaluates the performance of our executive officers in light of such goals and objectives and determines the compensation level of our executive officers based on such evaluation;
|
•
|
interprets, implements, administers and reviews all aspects of remuneration to our executive officers and other key officers, including their participation in incentive-compensation plans and equity-based compensation plans;
|
•
|
reviews all employment agreements, consulting agreements, severance arrangements and change in control agreements for our executive officers;
|
•
|
develops, approves, administers and recommends to our shareholders for their approval (to the extent such approval is required by any applicable law, regulation or NASDAQ Global Market rules) all of our stock ownership, stock option and other equity-based compensation plans and all related policies and programs; and
|
•
|
makes individual determinations with respect to grants of any shares, stock options or other equity-based awards under all equity-based compensation plans, and exercises such other power and authority as may be required or permitted under such plans.
|
•
|
attract, motivate and retain outstanding individual named executive officers;
|
•
|
reward named executive officers for attaining desired levels of profit and shareholder value; and
|
•
|
align the financial interests of each named executive officer with the interests of our shareholders to encourage each named executive officer to contribute to our long-term performance and success.
|
•
|
Base salaries;
|
•
|
Annual cash bonuses;
|
•
|
Equity-based incentive compensation;
|
•
|
Severance and payments upon change in control; and
|
•
|
General benefits.
|
|
|
Annual Salary ($)
|
||||||
Executive Officer
|
|
2017
|
|
2016
|
||||
Brian T. O'Malley
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
James J. O'Connor (1)
|
|
265,000
|
|
|
265,000
|
|
||
Diane D. Reed
(2)
|
|
265,000
|
|
|
—
|
|
||
Khanh Collins
|
|
200,000
|
|
|
200,000
|
|
(1)
|
Mr. O'Connor resigned from the Company on September 15, 2017.
|
(2)
|
Ms. Reed earned a proportional share of the annual salary listed in the table above based on her initial employment date of October 2, 2017.
|
Performance Goals
|
|
Threshold
|
|
Target
|
||||
Comparable Sales
|
|
0.7
|
%
|
|
0.7
|
%
|
||
Restaurant EBITDA
|
|
$
|
58,317,000
|
|
|
$
|
58,317,000
|
|
Adjusted EBITDA
|
|
$
|
29,546,000
|
|
|
$
|
29,546,000
|
|
Name
|
|
Target Award
($)
|
|
Actual Award
($)
|
||
Brian T. O’Malley
|
|
200,000
|
|
|
50,000
|
|
James J. O'Connor (1)
|
|
100,000
|
|
|
—
|
|
Diane D. Reed
|
|
100,000
|
|
|
25,000
|
|
Khanh Collins
|
|
100,000
|
|
|
25,000
|
|
(1)
|
Mr. O'Connor did not receive a bonus award as he resigned from the Company on September 15, 2017.
|
Name
|
Target Award
($)
|
|
Brian T. O’Malley
|
200,000
|
|
Diane D. Reed
|
100,000
|
|
Khanh Collins
|
100,000
|
|
Name
|
2017 Restricted Stock Grants (# of shares)
|
|
Brian T. O’Malley
|
20,000
|
|
Diane D. Reed
|
50,000
|
|
Khanh Collins
|
20,000
|
|
|
-
|
A significant portion of each Company employee’s compensation consists of base salary, which is not dependent upon the Company’s performance;
|
|
-
|
A meaningful portion of the compensation of the employees who are in the position to influence decisions of the Company is variable and performance-based; and the Compensation Committee retains discretion under our annual bonus program to adjust earned bonuses if it believes doing so is appropriate;
|
|
-
|
The Compensation Committee sets an appropriate mix between short-term and long-term compensation to ensure that employees focus on both short-term and long-term results; and
|
|
-
|
The Company’s executive officers own a meaningful portion of the Company, which reduces the incentive for the Company’s executive officers to engage in risky behavior designed to achieve short-term results at the expense of the Company’s long-term success.
|
COMPENSATION COMMITTEE
|
|
David B. Pittaway, Chairman
|
Harold O. Rosser II
|
Fortunato N. Valenti
|
Name and Principal
Position
|
|
Year
|
|
Salary
($) (1)
|
|
Bonus
($) (2)
|
|
Stock
Awards
($) (3)
|
|
Non-equity Incentive Plan Compensation
($) |
|
All Other
Compensation
($)(4)
|
|
Total
Compensation
($)
|
||||||
Brian T. O’Malley,
|
|
2017
|
|
400,000
|
|
|
50,000
|
|
|
95,000
|
|
|
—
|
|
|
—
|
|
|
545,000
|
|
President and Chief
|
|
2016
|
|
392,308
|
|
|
50,000
|
|
|
210,900
|
|
|
—
|
|
|
—
|
|
|
653,208
|
|
Executive Officer
|
|
2015
|
|
289,315
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
324,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diane D. Reed,
|
|
2017
|
|
66,250
|
|
|
25,000
|
|
|
117,500
|
|
|
—
|
|
|
—
|
|
|
208,750
|
|
Chief Financial Officer,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Treasurer and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Khanh Collins
|
|
2017
|
|
200,000
|
|
|
25,000
|
|
|
95,000
|
|
|
—
|
|
|
—
|
|
|
320,000
|
|
Chief Operating Officer
|
|
2016
|
|
200,000
|
|
|
25,000
|
|
|
140,600
|
|
|
—
|
|
|
—
|
|
|
365,600
|
|
|
|
2015
|
|
145,116
|
|
|
31,821
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176,937
|
|
(1)
|
Ms. Reed earned a proportional share of her annual salary based on her initial employment date of October 2, 2017.
|
(2)
|
Represents the discretionary bonuses awarded to our named executive officers for the relevant fiscal year.
|
(3)
|
Reflects the aggregate grant date fair value of restricted stock awards granted in 2016 or 2017, as applicable, based on the fair value of our common shares, on the day prior to the grant date, in accordance with FASB ASC Topic 718, excluding the effects of estimated forfeitures. Assumptions used in the calculation of this amount are included in the footnote titled “Stock Based Compensation” to the Company’s audited financial statements for the year ended December 31, 2017 included in this annual report.
|
(4)
|
Complimentary dining provided to our named executive officers is not required to be disclosed in this table because the amount of such benefits is less than the applicable disclosure threshold (i.e., $10,000). See “—General Benefits.”
|
|
|
|
|
Estimated Future
Payouts Under
Non-Equity Incentive Plan
Awards (1)
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) (2)
|
|
Grant
Date Fair
Value of
Stock and
Option
Awards
($)(3)
|
|||||||||
Name
|
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
||||||||
Brian T. O’Malley
|
|
—
|
|
—
|
|
|
200,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
3/3/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|
95,000
|
|
Diane D. Reed
|
|
—
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
10/2/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|
117,500
|
|
Khanh Collins
|
|
—
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
3/3/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|
95,000
|
|
(1)
|
Represents the target performance-based bonus opportunities of each named executive officer for 2017, as described in the CD&A above. For 2017, the Compensation Committee found that none of the defined performance goals had been achieved but, in its sole discretion, determined that the named executive officers would each receive a payout of 25% of their respective targets. See “—Annual Bonus Compensation.”
|
(2)
|
Represents restricted stock awards granted to the named executive officers in 2017 under the Stock Incentive Plan. The shares of restricted stock reported in this column generally vest 25% on each of the first four anniversaries of the grant date, subject to continued employment.
|
(3)
|
Represents the grant date fair value of the restricted stock awards granted to the named executive officers in 2017 under the Stock Incentive Plan, based on the average of the high and low price of our common shares on the business day prior to the grant date (i.e., $4.75 per share for Mr. O'Malley and Ms. Collins and $2.35 for Ms. Reed).
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||||||
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#) (1)
Exercisable
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of Stock that
have not
Vested (#)(2)
|
|
Market
Value of
Shares or
Units of Stock that
have not
Vested (3)
|
|
Restricted
Stock
Grant
Date
|
||||
Brian T. O’Malley
|
|
3,307
|
|
|
1.45
|
|
|
9/9/2019
|
|
2,136
|
|
|
5,340
|
|
|
2/27/2014
|
|
|
|
|
|
|
|
|
4,274
|
|
|
10,685
|
|
|
5/5/2016
|
||
|
|
|
|
|
|
|
|
30,000
|
|
|
75,000
|
|
|
3/3/2017
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diane D. Reed
|
|
|
|
|
|
|
|
50,000
|
|
|
125,000
|
|
|
10/2/2017
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Khanh Collins
|
|
|
|
|
|
|
|
675
|
|
|
1,688
|
|
|
2/27/2014
|
||
|
|
|
|
|
|
|
|
1,800
|
|
|
4,500
|
|
|
5/5/2016
|
||
|
|
|
|
|
|
|
|
20,000
|
|
|
50,000
|
|
|
3/3/2017
|
(1)
|
All option awards reported in this column were granted under the 2006 Plan and are fully vested and exercisable as of December 31, 2017, as described in the CD&A above. See “—Equity Compensation.”
|
(2)
|
The shares of restricted stock reported in this column that were granted on February 27, 2014 fully vested on February 27, 2017. The shares of restricted stock reported in this column that were granted on May 5, 2016 will vest (or have vested) in three equal installments on each of May 5, 2018, May 5, 2019 and May 5, 2020, subject to continued employment on the applicable vesting date. The shares of restricted stock reported in this column that were granted on March 3, 2017 will vest (or have vested) in four equal installments on each of March 3, 2018, March 3, 2019, March 3, 2020 and March 3, 2021, subject to continued employment on the applicable vesting date. The shares of restricted stock reported in this column that were granted on October 2, 2017 will vest (or have vested) in four equal installments on each of October 2, 2018, October 2, 2019, October 2, 2020 and October 2, 2021, subject to continued employment on the applicable vesting date. Each of the foregoing grants of restricted stock is subject to accelerated vesting under certain circumstances, as described below in the section titled “Equity Compensation”.
|
(3)
|
The market value of the shares of restricted stock is based on the closing sales price of the Company’s common shares on the NASDAQ Stock Market as of the last business day of its fiscal year ended December 31, 2017, which was $2.50 per share.
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||
Name
|
|
Number of Shares
Acquired on
Exercise (#)
|
|
Value Realized
on Exercise ($)
|
|
Number of Shares
Acquired on
Vesting (#)
|
|
Value Realized
on Vesting ($)(1)
|
||||
Brian O'Malley
|
|
—
|
|
|
—
|
|
|
11,774
|
|
|
54,890
|
|
Diane D. Reed
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Khanh Collins
|
|
—
|
|
|
—
|
|
|
6,575
|
|
|
31,453
|
|
(1)
|
The shares of restricted stock that vested in 2017 vested on February 27, 2017 (with respect to such shares that were granted on February 27, 2014), February 28, 2017 (with respect to such shares that were granted on February 28, 2013) and May 5, 2017 (with respect to such shares that were granted on May 5, 2016). The average of the high and low price of our common shares on the NASDAQ Stock Market on the business day prior to the vesting date was $3.98 per share for the vesting date of February 27, 2016, $3.98 per share for the vesting date of February 28, 2016 and $5.03 per share for the vesting date of May 5, 2017. This column represents the product of the number of shares vesting on the applicable vesting date multiplied by the average of the high and low price of our common shares on the business day prior to the applicable vesting date.
|
Name (1)
|
|
Fees Earned
or Paid
in Cash ($)
|
|
Stock
Awards
($)(2)
|
|
All Other
Compensation
($)(3)
|
|
Total
($)
|
||||
Thomas J. Baldwin
|
|
30,000
|
|
|
19,000
|
|
|
—
|
|
|
49,000
|
|
Alton F. Doody III (3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
James S. Gulmi
|
|
40,000
|
|
|
19,000
|
|
|
—
|
|
|
59,000
|
|
David B. Pittaway
|
|
30,000
|
|
|
19,000
|
|
|
—
|
|
|
49,000
|
|
Harold O. Rosser II
|
|
30,000
|
|
|
19,000
|
|
|
—
|
|
|
49,000
|
|
Fortunato N. Valenti
|
|
30,000
|
|
|
19,000
|
|
|
—
|
|
|
49,000
|
|
(1)
|
Brian O'Malley, the Company’s President and Chief Executive Officer, is not included in this table, as he is an employee of the Company and thus receives no compensation for his services as a director. The compensation received by Mr. O'Malley for fiscal year 2017 as an employee of the Company is shown above in the Summary Compensation Table.
|
(2)
|
Reflects the aggregate grant date fair value of restricted stock awards granted in 2017 based on the fair value of the restricted stock on the day prior to the grant date in accordance with FASB ASC Topic 718, excluding the effects of estimated forfeitures. Assumptions used in the calculation of this amount are included in the footnote titled “Stock Based Compensation” to the Company’s audited financial statements for the year ended December 31, 2017 included in this annual report. Each of Messrs. Baldwin, Gulmi, Pittaway, Rosser and Valenti received 4,000 shares of restricted stock in 2017 at a grant price of $4.75 per share, all of which remained unvested at year end. As of December 31, 2017, each of our directors listed above (other than Mr. Doody) held 7,675 shares of unvested stock awards.
|
(3)
|
Complimentary dining provided to our directors is not required to be disclosed in this table because the amount of such benefits is less than the applicable disclosure threshold (i.e., $10,000).
|
(4)
|
In 2017, Mr. Doody earned $221,000 in salary and $19,000 in aggregate grant date fair value of restricted stock awards for his role as a non-executive employee of the Company. Mr. Doody did not receive any compensation for his service on the Board of Directors, including his role as Chairman of the Board of Directors.
|
•
|
all persons known to be the beneficial owners of more than 5% of the Company’s outstanding common shares;
|
•
|
each of the Company’s directors and director nominees;
|
•
|
each of the Company's named executive officers; and
|
•
|
all of the Company executive officers, directors and director nominees as a group.
|
|
|
Shares Owned (1)
|
||||
Name and Address of Beneficial Owner (2)
|
|
Shares of Common
Stock Beneficially
Owned
|
|
Percentage of
Common Stock
Outstanding
|
||
TAC Capital LLC (3)
|
|
2,200,459
|
|
|
14.5
|
%
|
Aristotle Capital Boston, LLC (4)
|
|
1,050,145
|
|
|
6.8
|
%
|
Jackson Valley Fund LP (5)
|
|
1,000,000
|
|
|
6.6
|
%
|
PHR Holdings, LLC (6)
|
|
832,916
|
|
|
5.5
|
%
|
Kanen Wealth Management, LLC (7)
|
|
789,690
|
|
|
5.2
|
%
|
BlackRock Fund Advisors (8)
|
|
756,730
|
|
|
5.0
|
%
|
Named Executive Officers and Directors:
|
|
|
|
|
||
Alton F. Doody III (9)
|
|
677,134
|
|
|
4.5
|
%
|
Brian T. O’Malley (10)
|
|
116,679
|
|
|
*
|
|
Diane D. Reed (11)
|
|
34,229
|
|
|
*
|
|
James S. Gulmi (12)
|
|
32,225
|
|
|
*
|
|
Harold O. Rosser II (13)
|
|
18,725
|
|
|
*
|
|
David B. Pittaway (14)
|
|
14,725
|
|
|
*
|
|
Thomas J. Baldwin (15)
|
|
10,725
|
|
|
*
|
|
Fortunato N. Valenti (16)
|
|
8,725
|
|
|
*
|
|
Khanh Collins (17)
|
|
6,432
|
|
|
*
|
|
Executive Officers and Directors as a group (9 persons)(18)
|
|
919,599
|
|
|
6.0
|
%
|
*
|
Less than 1%
|
(1)
|
Under SEC rules, a person is deemed to be the beneficial owner of shares that can be acquired by such person within 60 days upon the exercise of options. All outstanding options granted under the 2006 Plan are immediately exercisable.
|
(2)
|
Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all common shares shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise indicated, the address for each person or entity named above is c/o Bravo Brio Restaurant Group, Inc., 777 Goodale Boulevard, Suite 100, Columbus, Ohio 43212.
|
(3)
|
TAC Capital LLC, TAC Financial Corporation, The Adam Corporation/Group and Donald A. Adam have shared power to vote or direct the vote of
2,200,459
shares and shared power to dispose of or direct the disposition of all
2,200,459
shares. The foregoing information is based solely on a Schedule 13D filed by TAC Capital LLC with the SEC on January 19, 2017. The address for TAC Capital LLC is One Momentum Blvd., Suite 1000, College Station, TX 77845.
|
(4)
|
Aristotle Capital Boston, LLC has shared power to vote or direct the vote of
1,050,145
shares, with sole power to dispose or direct the disposition of 478,476 shares and shared power to dispose or direct the disposition of 571,399 shares. The foregoing information is based solely on a Schedule 13G/A filed by Aristotle Capital Boston, LLC with the SEC on February 14, 2018. The address for Aristotle Capital Boston, LLC is 125 Summit Street, Suite 1220, Boston, MA 02110.
|
(5)
|
Jackson Valley Fund LP have shared power to vote or direct the vote of
1,000,000
shares and shared power to dispose of or direct the disposition of all
1,000,000
shares. The foregoing information is based solely on a Schedule 13G filed by Jackson Valley Fund LP with the SEC on January 16, 2018. The address for Jackson Valley Fund LP is 175 Beechwood Road, Summit, NJ 07901.
|
(6)
|
PHR Holdings, LLC, OSG Consultants, Inc. and Robert I. Earl have shared power to vote or direct the vote of
832,916
shares and shared power to dispose of or direct the disposition of all
832,916
shares. The foregoing information is based solely on a Schedule 13D filed by PHR Holdings, LLC with the SEC on January 29, 2018. The address for PHR Holdings, LLC is 4700 Millenia BLVD, Suite 400, Orlando, FL 32839.
|
(7)
|
Kanen Wealth Management, LLC has shared power to vote or direct the vote of
789,690
shares and shared power to dispose of or direct the disposition of all
789,690
shares. The foregoing information is based solely on a Schedule 13D filed by Kanen Wealth Management, LLC with the SEC on January 31, 2018. The address for Kanen Wealth Management, LLC is 5850 Coral Ridge Drive, Suite 309, Coral Springs, FL 33076.
|
(8)
|
BlackRock, Inc. has sole power to vote or direct the vote of 720,379 shares and sole power to dispose of or direct the disposition of all
756,730
shares. The foregoing information is based solely on a Schedule 13G/A filed by BlackRock Inc. with the SEC on January 9, 2018. The address for BlackRock Inc. is 40 East 52
nd
Street, New York, NY 10022.
|
(9)
|
Mr. Doody is a director. Does not include 3,000 shares of unvested restricted stock granted to Mr. Doody in 2016 or 4,000 shares of unvested restricted stock granted to Mr. Doody in 2017.
|
(10)
|
Mr. O'Malley is a director and named executive officer. Includes 3,307 common shares that Mr. O'Malley has the right to acquire within 60 days of February 21, 2018. Does not include 2,136 shares of unvested restricted stock granted to Mr. O'Malley in 2014, 22,500 shares of unvested restricted stock granted to Mr. O'Malley in 2016 or 30,000 shares of unvested restricted stock granted to Mr. O'Malley in 2017.
|
(11)
|
Ms. Reed is a named executive officer. Does not include 50,000 shares of unvested restricted stock granted to Ms. Reed in October 2017.
|
(12)
|
Mr. Gulmi is a director. Does not include 675 shares of unvested restricted stock granted to Mr. Gulmi in 2014, 3,000 shares of unvested restricted stock granted to Mr. Gulmi in 2016 or 4,000 shares of unvested restricted stock granted granted to Mr. Gulmi in 2017.
|
(13)
|
Mr. Rosser is a director. Does not include 675 shares of unvested restricted stock granted to Mr. Rosser in 2014, 3,000 shares of unvested restricted stock granted to Mr. Rosser in 2016 or 4,000 shares of unvested restricted stock granted granted to Mr. Rosser in 2017.
|
(14)
|
Mr. Pittaway is a director. Does not include 675 shares of unvested restricted stock granted to Mr. Pittaway in 2014, 3,000 shares of unvested restricted stock granted to Mr. Pittaway in 2016 or 4,000 shares of unvested restricted stock granted granted to Mr. Pittaway in 2017.
|
(15)
|
Mr. Baldwin is a director. Does not include 675 shares of unvested restricted stock granted to Mr. Baldwin in 2014, 3,000 shares of unvested restricted stock granted to Mr. Baldwin in 2016 or 4,000 shares of unvested restricted stock granted granted to Mr. Baldwin in 2017.
|
(16)
|
Mr. Valenti is a director. Does not include 675 shares of unvested restricted stock granted to Mr. Valenti in 2014, 3,000 shares of unvested restricted stock granted to Mr. Valenti in 2016 or 4,000 shares granted to Mr. Valenti in 2017.
|
(17)
|
Ms. Collins is a named executive officer. Does not include 900 shares of unvested restricted stock granted to Ms. Collins in 2014, 15,000 shares of unvested restricted stock granted to Ms. Collins in 2016 or 20,000 shares of unvested restricted stock granted to Ms. Collins in 2017.
|
(18)
|
See notes 9-17. Includes 3,307 common shares that can be acquired within 60 days of February 21, 2018.
|
Plan category
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
|
|
Weighted-average
exercise price of
outstanding
options, warrants
and rights
(b)
|
|
Number of securities
remaining
available for
future issuance
under equity
compensation plans
(excluding securities
reflected in column (a)).
(c)
|
|||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|||
Bravo Development, Inc. Option Plan
|
15,545
|
|
|
1.45
|
|
|
—
|
|
Bravo Brio Restaurant Group, Inc. Stock Incentive Plan
|
—
|
|
|
—
|
|
|
908,342
|
|
Equity Compensation plans not approved by security holders:
|
|
|
|
|
|
|||
None
|
|
|
|
|
|
|||
Total
|
15,545
|
|
|
1.45
|
|
|
908,342
|
|
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||
Audit Fees (1)
|
|
$
|
525,000
|
|
|
$
|
525,000
|
|
Audit-Related Fees (2)
|
|
$
|
135,000
|
|
|
$
|
—
|
|
Tax Fees
|
|
$
|
—
|
|
|
$
|
—
|
|
All Other Fees
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Audit Fees consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements, review of the interim consolidated financial statements included in quarterly reports, the audit of our internal control over financial reporting and services that are normally provided by Deloitte & Touche LLP in connection with statutory and regulatory filings or engagements.
|
(2)
|
Audit-Related fees for fiscal 2017 were related to due diligence procedures performed by Deloitte & Touche LLP which were reviewed and approved by the Audit Committee in accordance with Company policy.
|
1.
|
Financial Statements: See Index to Consolidated Financial Statements appearing on page 63 of this annual report.
|
2.
|
Financial Statement Schedules: None.
|
3.
|
Exhibits: See Exhibit Index appearing on pages 86 and 87 of this annual report.
|
|
Page No.
|
Consolidated Statements of Shareholders’ Equity
(Deficiency in Assets)
|
|
|
December 31, 2017
|
|
December 25, 2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
393
|
|
|
$
|
444
|
|
Accounts receivable
|
10,397
|
|
|
9,587
|
|
||
Tenant improvement allowance receivable
|
116
|
|
|
799
|
|
||
Inventories
|
3,077
|
|
|
3,114
|
|
||
Prepaid expenses and other current assets
|
2,060
|
|
|
3,339
|
|
||
Total current assets
|
16,043
|
|
|
17,283
|
|
||
Property and equipment, net
|
121,251
|
|
|
145,120
|
|
||
Other assets, net
|
4,873
|
|
|
4,359
|
|
||
Total assets
|
$
|
142,167
|
|
|
$
|
166,762
|
|
|
|
|
|
||||
Liabilities and Shareholders’ (Deficiency in Assets) Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Trade and construction payables
|
$
|
12,614
|
|
|
$
|
15,514
|
|
Accrued expenses
|
26,057
|
|
|
27,351
|
|
||
Current portion of long-term debt
|
38,500
|
|
|
4,000
|
|
||
Deferred lease incentives
|
7,174
|
|
|
7,334
|
|
||
Deferred gift card revenue
|
19,859
|
|
|
18,618
|
|
||
Total current liabilities
|
104,204
|
|
|
72,817
|
|
||
Deferred lease incentives
|
46,493
|
|
|
54,459
|
|
||
Long-term debt
|
—
|
|
|
37,500
|
|
||
Other long-term liabilities
|
21,799
|
|
|
23,516
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 13)
|
|
|
|
||||
|
|
|
|
||||
Shareholders’ (deficiency in assets) equity
|
|
|
|
||||
Common shares, no par value per share— authorized 100,000,000 shares; 21,183,764 shares issued at December 31, 2017; and 21,069,454 shares issued at December 25, 2016
|
203,531
|
|
|
202,561
|
|
||
Preferred shares, no par value per share— authorized 5,000,000; and 0 shares issued and outstanding at December 31, 2017 and December 25, 2016
|
—
|
|
|
—
|
|
||
Treasury shares, 5,977,860 shares at December 31, 2017 and December 25, 2016
|
(81,019
|
)
|
|
(81,019
|
)
|
||
Retained deficit
|
(152,841
|
)
|
|
(143,072
|
)
|
||
Total shareholders’ (deficiency in assets) equity
|
(30,329
|
)
|
|
(21,530
|
)
|
||
Total liabilities and shareholders’ (deficiency in assets) equity
|
$
|
142,167
|
|
|
$
|
166,762
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 31, 2017
|
|
December 25, 2016
|
|
December 27, 2015
|
||||||
Revenues
|
$
|
407,607
|
|
|
$
|
410,254
|
|
|
$
|
423,994
|
|
Costs and expenses
|
|
|
|
|
|
||||||
Cost of sales
|
104,890
|
|
|
106,910
|
|
|
106,942
|
|
|||
Labor
|
151,424
|
|
|
151,797
|
|
|
151,893
|
|
|||
Operating
|
66,405
|
|
|
67,334
|
|
|
69,568
|
|
|||
Occupancy
|
31,439
|
|
|
32,059
|
|
|
32,226
|
|
|||
General and administrative expenses
|
29,381
|
|
|
28,562
|
|
|
24,520
|
|
|||
Restaurant pre-opening costs
|
411
|
|
|
1,038
|
|
|
3,009
|
|
|||
Asset impairment charges
|
11,215
|
|
|
15,409
|
|
|
10,201
|
|
|||
Depreciation and amortization
|
21,133
|
|
|
22,324
|
|
|
22,435
|
|
|||
Total costs and expenses
|
416,298
|
|
|
425,433
|
|
|
420,794
|
|
|||
(Loss) income from operations
|
(8,691
|
)
|
|
(15,179
|
)
|
|
3,200
|
|
|||
Interest expense, net
|
2,464
|
|
|
1,703
|
|
|
1,484
|
|
|||
(Loss) income before income taxes
|
(11,155
|
)
|
|
(16,882
|
)
|
|
1,716
|
|
|||
Income tax (benefit) expense
|
(1,386
|
)
|
|
57,833
|
|
|
(2,864
|
)
|
|||
Net (loss) income
|
$
|
(9,769
|
)
|
|
$
|
(74,715
|
)
|
|
$
|
4,580
|
|
|
|
|
|
|
|
||||||
Net (loss) income per share — basic
|
$
|
(0.64
|
)
|
|
$
|
(5.09
|
)
|
|
$
|
0.30
|
|
Net (loss) income per share — diluted
|
$
|
(0.64
|
)
|
|
$
|
(5.09
|
)
|
|
$
|
0.29
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding — basic
|
15,173
|
|
|
14,680
|
|
|
15,143
|
|
|||
Weighted average shares outstanding — diluted
|
15,173
|
|
|
14,680
|
|
|
15,865
|
|
|
Common Shares
|
|
|
|
Treasury Shares
|
|
|
||||||||||||||
|
Shares
|
|
Amount
|
|
Retained
Deficit
|
|
Shares
|
|
Amount
|
|
Shareholders’
Equity (Deficiency in Assets)
|
||||||||||
Balance — December 28, 2014
|
20,177,174
|
|
|
$
|
199,718
|
|
|
$
|
(72,937
|
)
|
|
(5,083,281
|
)
|
|
$
|
(72,997
|
)
|
|
$
|
53,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
—
|
|
|
4,580
|
|
|
—
|
|
|
—
|
|
|
4,580
|
|
||||
Share-based compensation costs
|
—
|
|
|
1,498
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,498
|
|
||||
Purchase of treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(451,027
|
)
|
|
(4,561
|
)
|
|
(4,561
|
)
|
||||
Proceeds from the exercise of stock options
|
49,927
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||
Issuance of shares of restricted stock
|
97,702
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Shares withheld for employee taxes
|
(31,507
|
)
|
|
(417
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(417
|
)
|
||||
Excess tax benefit from share based payments
|
—
|
|
|
(133
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(133
|
)
|
||||
Balance — December 27, 2015
|
20,293,296
|
|
|
$
|
200,739
|
|
|
$
|
(68,357
|
)
|
|
(5,534,308
|
)
|
|
$
|
(77,558
|
)
|
|
$
|
54,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
—
|
|
|
(74,715
|
)
|
|
—
|
|
|
—
|
|
|
(74,715
|
)
|
||||
Share-based compensation costs
|
—
|
|
|
1,143
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,143
|
|
||||
Purchase of treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(443,552
|
)
|
|
(3,461
|
)
|
|
(3,461
|
)
|
||||
Proceeds from the exercise of stock options
|
734,040
|
|
|
1,064
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,064
|
|
||||
Issuance of shares of restricted stock
|
81,502
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Shares withheld for employee taxes
|
(39,384
|
)
|
|
(239
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(239
|
)
|
||||
Excess tax deficiency from share based payments
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(146
|
)
|
||||
Balance — December 25, 2016
|
21,069,454
|
|
|
$
|
202,561
|
|
|
$
|
(143,072
|
)
|
|
(5,977,860
|
)
|
|
$
|
(81,019
|
)
|
|
$
|
(21,530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
(9,769
|
)
|
|
—
|
|
|
—
|
|
|
(9,769
|
)
|
||||
Share-based compensation costs
|
—
|
|
|
988
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
988
|
|
||||
Proceeds from the exercise of stock options
|
17,637
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
Issuance of shares of restricted stock
|
106,123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Shares withheld for employee taxes
|
(9,450
|
)
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
||||
Balance — December 31, 2017
|
21,183,764
|
|
|
$
|
203,531
|
|
|
$
|
(152,841
|
)
|
|
(5,977,860
|
)
|
|
$
|
(81,019
|
)
|
|
$
|
(30,329
|
)
|
|
Fiscal Year Ended
|
||||||||||
|
December 31, 2017
|
|
December 25, 2016
|
|
December 27, 2015
|
||||||
Cash flow provided by operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(9,769
|
)
|
|
$
|
(74,715
|
)
|
|
$
|
4,580
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization (excluding deferred lease incentives)
|
21,469
|
|
|
22,419
|
|
|
22,520
|
|
|||
Loss on disposals of property and equipment
|
700
|
|
|
1,090
|
|
|
844
|
|
|||
Write-off of unamortized loan origination fees
|
69
|
|
|
89
|
|
|
—
|
|
|||
Impairment of assets
|
11,215
|
|
|
15,409
|
|
|
10,201
|
|
|||
Amortization of deferred lease incentives
|
(7,977
|
)
|
|
(7,844
|
)
|
|
(7,994
|
)
|
|||
Stock compensation costs
|
988
|
|
|
1,143
|
|
|
1,498
|
|
|||
Deferred income taxes
|
—
|
|
|
58,543
|
|
|
(3,723
|
)
|
|||
Changes in certain assets and liabilities:
|
|
|
|
|
|
||||||
Accounts and tenant improvement receivables
|
(127
|
)
|
|
(483
|
)
|
|
(1,211
|
)
|
|||
Inventories
|
37
|
|
|
49
|
|
|
(31
|
)
|
|||
Prepaid expenses and other current assets
|
1,439
|
|
|
(695
|
)
|
|
320
|
|
|||
Trade and construction payables
|
(2,773
|
)
|
|
504
|
|
|
2,611
|
|
|||
Deferred lease incentives
|
(149
|
)
|
|
2,854
|
|
|
7,608
|
|
|||
Deferred gift card revenue
|
1,241
|
|
|
3,890
|
|
|
1,945
|
|
|||
Other accrued liabilities
|
(1,294
|
)
|
|
(1,664
|
)
|
|
2,761
|
|
|||
Other — net
|
(2,562
|
)
|
|
(239
|
)
|
|
301
|
|
|||
Net cash provided by operating activities
|
12,507
|
|
|
20,350
|
|
|
42,230
|
|
|||
Cash flow used in investing activities:
|
|
|
|
|
|
||||||
Purchase of property and equipment
|
(9,276
|
)
|
|
(15,512
|
)
|
|
(24,605
|
)
|
|||
Net cash used in investing activities
|
(9,276
|
)
|
|
(15,512
|
)
|
|
(24,605
|
)
|
|||
Cash flow used in financing activities:
|
|
|
|
|
|
||||||
Proceeds from long-term debt
|
580,200
|
|
|
623,900
|
|
|
705,100
|
|
|||
Payments on long-term debt
|
(583,200
|
)
|
|
(625,700
|
)
|
|
(717,800
|
)
|
|||
Proceeds from the exercise of stock options
|
25
|
|
|
1,064
|
|
|
73
|
|
|||
Shares withheld for employee taxes
|
(43
|
)
|
|
(239
|
)
|
|
(417
|
)
|
|||
Repurchase of treasury shares
|
—
|
|
|
(3,461
|
)
|
|
(4,561
|
)
|
|||
Loan origination fees related to new credit facility
|
(264
|
)
|
|
(405
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(3,282
|
)
|
|
(4,841
|
)
|
|
(17,605
|
)
|
|||
Net increase/(decrease) in cash equivalents:
|
(51
|
)
|
|
(3
|
)
|
|
20
|
|
|||
Cash and equivalents — beginning of year
|
444
|
|
|
447
|
|
|
427
|
|
|||
Cash and equivalents — end of year
|
$
|
393
|
|
|
$
|
444
|
|
|
$
|
447
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
2,226
|
|
|
$
|
1,368
|
|
|
$
|
1,308
|
|
Income taxes (refund) paid, net
|
$
|
(1,334
|
)
|
|
$
|
548
|
|
|
$
|
703
|
|
Property additions financed by trade and construction payables
|
$
|
490
|
|
|
$
|
617
|
|
|
$
|
1,890
|
|
|
Fiscal Years
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net (loss) income attributed to common shareholders
|
$
|
(9,769
|
)
|
|
$
|
(74,715
|
)
|
|
$
|
4,580
|
|
Weighted average common shares outstanding
|
15,173
|
|
|
14,680
|
|
|
15,143
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options
|
—
|
|
|
—
|
|
|
716
|
|
|||
Restricted stock
|
—
|
|
|
—
|
|
|
6
|
|
|||
Weighted average common and potentially issuable common shares outstanding — diluted
|
15,173
|
|
|
14,680
|
|
|
15,865
|
|
|||
Basic net (loss) income per common share
|
$
|
(0.64
|
)
|
|
$
|
(5.09
|
)
|
|
$
|
0.30
|
|
Diluted net (loss) income per common share
|
$
|
(0.64
|
)
|
|
$
|
(5.09
|
)
|
|
$
|
0.29
|
|
|
2017
|
|
2016
|
||||
Land and buildings
|
$
|
5,757
|
|
|
$
|
5,894
|
|
Leasehold improvements
|
182,533
|
|
|
191,858
|
|
||
Equipment and fixtures
|
100,331
|
|
|
104,318
|
|
||
Construction in progress
|
1,640
|
|
|
1,480
|
|
||
Total
|
290,261
|
|
|
303,550
|
|
||
Less accumulated depreciation and amortization
|
(169,010
|
)
|
|
(158,430
|
)
|
||
Property and equipment, net
|
$
|
121,251
|
|
|
$
|
145,120
|
|
|
2017
|
|
2016
|
||||
Loan origination fees
|
$
|
834
|
|
|
$
|
679
|
|
Liquor licenses
|
3,047
|
|
|
3,261
|
|
||
Trademarks
|
478
|
|
|
478
|
|
||
Deposits
|
337
|
|
|
338
|
|
||
Income tax receivable
|
888
|
|
|
—
|
|
||
Other assets — at cost
|
5,584
|
|
|
4,756
|
|
||
Less accumulated amortization
|
(711
|
)
|
|
(397
|
)
|
||
Other assets — net
|
$
|
4,873
|
|
|
$
|
4,359
|
|
|
2017
|
|
2016
|
||||
Term loan
|
$
|
30,000
|
|
|
$
|
34,000
|
|
Revolving credit facility
|
8,500
|
|
|
7,500
|
|
||
Total
|
38,500
|
|
|
41,500
|
|
||
Less current maturities
|
38,500
|
|
|
4,000
|
|
||
Long-term debt
|
$
|
—
|
|
|
$
|
37,500
|
|
|
2017
|
|
2016
|
||||
Compensation and related benefits
|
$
|
5,482
|
|
|
$
|
9,255
|
|
Accrued self-insurance claims liability
|
7,340
|
|
|
8,363
|
|
||
Other taxes payable
|
4,386
|
|
|
4,357
|
|
||
Accrued legal expenses
|
4,320
|
|
|
965
|
|
||
Other accrued liabilities
|
4,529
|
|
|
4,411
|
|
||
Total accrued expenses
|
$
|
26,057
|
|
|
$
|
27,351
|
|
|
2017
|
|
2016
|
||||
Deferred rent
|
$
|
19,107
|
|
|
$
|
20,667
|
|
Other long-term liabilities
|
2,692
|
|
|
2,849
|
|
||
Total other long-term liabilities
|
$
|
21,799
|
|
|
$
|
23,516
|
|
2018
|
$
|
28,442
|
|
2019
|
28,255
|
|
|
2020
|
27,652
|
|
|
2021
|
26,261
|
|
|
2022
|
24,100
|
|
|
Thereafter
|
83,006
|
|
|
Total
|
$
|
217,716
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Minimum rent
|
$
|
20,684
|
|
|
$
|
21,560
|
|
|
$
|
20,144
|
|
Contingent rent
|
(34
|
)
|
|
345
|
|
|
597
|
|
|||
Total
|
$
|
20,650
|
|
|
$
|
21,905
|
|
|
$
|
20,741
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Outstanding — beginning of year
|
56,691
|
|
|
790,731
|
|
|
840,658
|
|
|||
Weighted-average exercise price
|
$
|
1.45
|
|
|
$
|
1.45
|
|
|
$
|
1.45
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted-average exercise price
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Exercised
|
(17,637
|
)
|
|
(734,040
|
)
|
|
(49,927
|
)
|
|||
Weighted-average exercise price
|
$
|
1.45
|
|
|
$
|
1.45
|
|
|
$
|
1.45
|
|
Forfeited
|
(23,509
|
)
|
|
—
|
|
|
—
|
|
|||
Weighted-average exercise price
|
$
|
1.45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Outstanding — end of year
|
15,545
|
|
|
56,691
|
|
|
790,731
|
|
|||
Weighted-average exercise price
|
$
|
1.45
|
|
|
$
|
1.45
|
|
|
$
|
1.45
|
|
Exercisable — end of year
|
15,545
|
|
|
56,691
|
|
|
790,731
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Outstanding — beginning of year
|
320,570
|
|
|
195,422
|
|
|
294,749
|
|
|||
Weighted-average grant price
|
$
|
9.20
|
|
|
$
|
15.41
|
|
|
$
|
16.22
|
|
Granted
|
286,500
|
|
|
248,500
|
|
|
34,500
|
|
|||
Weighted-average grant price
|
$
|
4.28
|
|
|
$
|
7.04
|
|
|
$
|
13.32
|
|
Vested
|
(106,123
|
)
|
|
(81,502
|
)
|
|
(97,702
|
)
|
|||
Weighted-average grant price
|
$
|
10.75
|
|
|
$
|
16.38
|
|
|
$
|
16.70
|
|
Forfeited
|
(85,586
|
)
|
|
(41,850
|
)
|
|
(36,125
|
)
|
|||
Weighted-average grant price
|
$
|
6.82
|
|
|
$
|
11.41
|
|
|
$
|
16.22
|
|
Outstanding — end of year
|
415,361
|
|
|
320,570
|
|
|
195,422
|
|
|||
Weighted-average grant price
|
$
|
5.90
|
|
|
$
|
9.20
|
|
|
$
|
15.41
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current income tax expense:
|
|
|
|
|
|
||||||
Federal
|
$
|
(436
|
)
|
|
$
|
(769
|
)
|
|
$
|
503
|
|
State and local
|
55
|
|
|
59
|
|
|
356
|
|
|||
Total current income tax expense
|
(381
|
)
|
|
(710
|
)
|
|
859
|
|
|||
Deferred income tax (benefit) expense:
|
|
|
|
|
|
||||||
Federal
|
(1,023
|
)
|
|
55,818
|
|
|
(3,720
|
)
|
|||
State and local
|
18
|
|
|
2,725
|
|
|
(3
|
)
|
|||
Total deferred income tax (benefit) expense
|
(1,005
|
)
|
|
58,543
|
|
|
(3,723
|
)
|
|||
Total income tax (benefit) expense
|
$
|
(1,386
|
)
|
|
$
|
57,833
|
|
|
$
|
(2,864
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Provision at statutory rate
|
$
|
(3,904
|
)
|
|
$
|
(5,909
|
)
|
|
$
|
601
|
|
FICA tip credit
|
(4,684
|
)
|
|
(5,094
|
)
|
|
(5,496
|
)
|
|||
State income taxes — net of federal benefit
|
72
|
|
|
(405
|
)
|
|
158
|
|
|||
Permanent items
|
1,174
|
|
|
4,559
|
|
|
1,873
|
|
|||
Deferred tax asset valuation allowance
|
(3,689
|
)
|
|
64,682
|
|
|
—
|
|
|||
Federal and state rate change
|
$
|
9,645
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total income tax (benefit) expense
|
$
|
(1,386
|
)
|
|
$
|
57,833
|
|
|
$
|
(2,864
|
)
|
|
Fiscal 2017
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
Year
|
||||||||||
Revenues
|
$
|
106,719
|
|
|
$
|
103,041
|
|
|
$
|
88,731
|
|
|
$
|
109,116
|
|
|
$
|
407,607
|
|
Income (loss) from operations (1)
|
1,090
|
|
|
2,651
|
|
|
(1,837
|
)
|
|
(10,595
|
)
|
|
(8,691
|
)
|
|||||
Net income (loss)
|
550
|
|
|
1,946
|
|
|
(2,472
|
)
|
|
(9,793
|
)
|
|
(9,769
|
)
|
|||||
Basic net income (loss) per share
|
$
|
0.04
|
|
|
$
|
0.13
|
|
|
$
|
(0.16
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
(0.64
|
)
|
Diluted net income (loss) per share (5)
|
$
|
0.04
|
|
|
$
|
0.13
|
|
|
$
|
(0.16
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
(0.64
|
)
|
Basic weighted average shares outstanding
|
15,113
|
|
|
15,174
|
|
|
15,197
|
|
|
15,204
|
|
|
15,173
|
|
|||||
Diluted weighted average shares outstanding (2)
|
15,138
|
|
|
15,221
|
|
|
15,197
|
|
|
15,204
|
|
|
15,173
|
|
|||||
|
Fiscal 2016
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
Year
|
||||||||||
Revenues
|
$
|
108,800
|
|
|
$
|
105,213
|
|
|
$
|
94,588
|
|
|
$
|
101,653
|
|
|
$
|
410,254
|
|
Income (loss) from operations (3)
|
3,192
|
|
|
(305
|
)
|
|
(4,686
|
)
|
|
(13,380
|
)
|
|
(15,179
|
)
|
|||||
Net (loss) income (4)
|
2,248
|
|
|
(654
|
)
|
|
(2,985
|
)
|
|
(73,324
|
)
|
|
(74,715
|
)
|
|||||
Basic net income (loss) per share
|
$
|
0.15
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(4.96
|
)
|
|
$
|
(5.09
|
)
|
Diluted net income (loss) per share (5)
|
$
|
0.15
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(4.96
|
)
|
|
$
|
(5.09
|
)
|
Basic weighted average shares outstanding
|
14,766
|
|
|
14,597
|
|
|
14,582
|
|
|
14,776
|
|
|
14,680
|
|
|||||
Diluted weighted average shares outstanding (2)
|
15,416
|
|
|
14,597
|
|
|
14,582
|
|
|
14,776
|
|
|
14,680
|
|
(1)
|
Contains asset impairment charges that decreased income by
$11.2 million
related to
six
restaurants
in the fourth quarter of fiscal 2017.
|
(2)
|
In periods where the Company incurred a net loss, all stock options and unvested shares of restricted stock are considered anti-dilutive and not included in that quarter's diluted weighted average shares outstanding.
|
(3)
|
Contains asset impairment charges that decreased income by
$1.2 million
related to
one
restaurant in the second quarter and
$14.2 million
related to
eight
restaurants in the fourth quarter of fiscal 2016.
|
(4)
|
Contains valuation allowance on net deferred tax assets of
$64.7 million
in the fourth quarter of fiscal 2016.
|
(5)
|
Sum of the quarterly amounts do not equal the total year amount due to rounding. Additionally, quarterly and year-to-date computations of per share amounts are made independently.
|
|
|
Description
|
|
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
10.1
|
|
|
10.2
|
|
|
10.5+
|
|
|
10.6+
|
|
|
10.7+
|
|
|
10.8+
|
|
|
10.9+
|
|
|
10.10+
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13+
|
|
|
10.14
|
|
|
|
Description
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19+
|
|
|
10.20+
|
|
|
10.21+
|
|
|
11
|
|
|
12.1
|
|
|
21.1
|
|
|
23.1
|
|
|
24.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
+
|
Indicates management contract or compensatory plan or arrangement.
|
*
|
Certain information in this exhibit has been omitted and filed separately with the SEC. Confidential treatment has been granted by the SEC with respect to the omitted portions.
|
|
Bravo Brio Restaurant Group, Inc.
|
|
|
|
|
|
By:
|
/s/ Brian T. O'Malley
|
|
|
Brian T. O'Malley
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
|
Signature
|
Title
|
|
Date
|
|
|
|
|
|
|
By:
|
|
/s/ Brian T. O'Malley
Brian T. O'Malley
|
President, Chief Executive Officer and
Director (principal executive officer)
|
|
March 14, 2018
|
|
|
|
|
|
|
By:
|
|
/s/ Diane D. Reed
Diane D. Reed
|
Chief Financial Officer, Treasurer and
Secretary (principal financial officer
and principal accounting officer)
|
|
March 14, 2018
|
|
|
|
|
|
|
By:
|
|
/s/ Thomas J. Baldwin
Thomas J. Baldwin
|
Director
|
|
March 14, 2018
|
|
|
|
|
|
|
By:
|
|
/s/ Alton F. Doody III
Alton F. Doody III
|
Director
|
|
March 14, 2018
|
|
|
|
|
|
|
By:
|
|
/s/ James S. Gulmi
James S. Gulmi
|
Director
|
|
March 14, 2018
|
|
|
|
|
|
|
By:
|
|
/s/ David B. Pittaway
David B. Pittaway
|
Director
|
|
March 14, 2018
|
|
|
|
|
|
|
By:
|
|
/s/ Harold O. Rosser, II
Harold O. Rosser, II
|
Director
|
|
March 14, 2018
|
|
|
|
|
|
|
By:
|
|
/s/ Fortunato N. Valenti
Fortunato N. Valenti
|
Director
|
|
March 14, 2018
|
Period
|
Minimum Consolidated
EBITDA
|
Second Amendment Effective Date through November 30, 2017
|
$15,000,000
|
December 31, 2017
|
$18,000,000
|
January 1, 2018 and thereafter
|
$15,000,000
|
Exhibit 12.1
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
BRAVO BRIO RESTAURANT GROUP, INC.
|
|||||||||||||||||||
EARNINGS TO FIXED CHARGES
|
|||||||||||||||||||
(in thousands, except ratios)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Year-ended
|
|||||||||||||||||
|
|
December 31,
|
|
December 25,
|
|
December 27,
|
|
December 28,
|
|
December 29,
|
|||||||||
Computation of Earnings:
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) before income taxes
|
|
$
|
(11,155
|
)
|
|
$
|
(16,882
|
)
|
|
$
|
1,716
|
|
|
14,105
|
|
|
$
|
7,275
|
|
Add
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross Interest Expense
|
|
2,360
|
|
|
1,579
|
|
|
1,399
|
|
|
651
|
|
|
767
|
|
||||
Capitalized Interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
40% of Minimum Rent
|
|
8,274
|
|
|
8,624
|
|
|
8,058
|
|
|
7,481
|
|
|
7,572
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings as Adjusted
|
|
(521
|
)
|
|
(6,679
|
)
|
|
11,173
|
|
|
22,237
|
|
|
15,614
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Computation of Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross Interest Expense
|
|
2,360
|
|
|
1,579
|
|
|
1,399
|
|
|
651
|
|
|
767
|
|
||||
40% of Minimum Rent
|
|
8,274
|
|
|
8,624
|
|
|
8,058
|
|
|
7,481
|
|
|
7,572
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fixed Charges
|
|
10,634
|
|
|
10,203
|
|
|
9,457
|
|
|
8,132
|
|
|
8,339
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Ratios of Earnings to Fixed Charges
|
|
(0.05
|
)
|
|
(0.65
|
)
|
|
1.18
|
|
|
2.73
|
|
|
1.87
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
Entity
|
|
Jurisdiction
|
|
|
|
Brio Tuscan Grille of Maryland, Inc.
|
|
MD
|
Cherry Hill Two, LLC
|
|
NJ
|
Bravo Development of Kansas, Inc.
|
|
KS
|
Brio Tuscan Grille of Baltimore, LLC
|
|
MD
|
Brio Marlton, LLC
|
|
DE
|
Brio Tuscan Grille of Cherokee, LLC
|
|
DE
|
1.
|
I have reviewed this annual report on Form 10-K of Bravo Brio Restaurant Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: March 14, 2018
|
|
|
|
|
/s/ Brian T. O'Malley
|
|
Brian T. O'Malley
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Bravo Brio Restaurant Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: March 14, 2018
|
|
|
|
|
/s/ Diane D. Reed
|
|
Diane D. Reed
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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Dated: March 14, 2018
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/s/ Brian T. O'Malley
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Brian T. O'Malley
President and Chief Executive Officer
(Principal Executive Officer)
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Dated: March 14, 2018
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/s/ Diane D. Reed
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Diane D. Reed
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
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