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(Mark One)
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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47-1941186
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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24 Union Square East, 5th Floor
New York, New York
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10003
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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þ
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Page
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March 30
2016 |
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|
December 30
2015 |
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||
ASSETS
|
|
|
|
||||||
Current assets:
|
|
|
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||||||
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Cash and cash equivalents
|
$
|
65,855
|
|
|
$
|
70,849
|
|
|
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Accounts receivable
|
3,337
|
|
|
4,217
|
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|||
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Inventories
|
621
|
|
|
543
|
|
|||
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Prepaid expenses and other current assets
|
3,600
|
|
|
3,325
|
|
|||
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Total current assets
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73,413
|
|
|
78,934
|
|
|||
Property and equipment, net
|
102,279
|
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|
93,041
|
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||||
Deferred income taxes, net
|
241,466
|
|
|
201,957
|
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||||
Other assets
|
5,352
|
|
|
5,615
|
|
||||
TOTAL ASSETS
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$
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422,510
|
|
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$
|
379,547
|
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||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
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||||||
Current liabilities:
|
|
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||||||
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Accounts payable
|
$
|
6,035
|
|
|
$
|
6,786
|
|
|
|
Accrued expenses
|
5,442
|
|
|
6,801
|
|
|||
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Accrued wages and related liabilities
|
3,718
|
|
|
5,804
|
|
|||
|
Other current liabilities
|
5,026
|
|
|
4,614
|
|
|||
|
Total current liabilities
|
20,221
|
|
|
24,005
|
|
|||
Note payable
|
313
|
|
|
313
|
|
||||
Deferred rent
|
24,381
|
|
|
22,927
|
|
||||
Liabilities under tax receivable agreement, net of current portion
|
205,851
|
|
|
170,933
|
|
||||
Other long-term liabilities
|
4,326
|
|
|
4,350
|
|
||||
Total liabilities
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255,092
|
|
|
222,528
|
|
||||
Commitments and contingencies
|
|
|
|
||||||
Stockholders' equity:
|
|
|
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||||||
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Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of March 30, 2016 and December 30, 2015.
|
—
|
|
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—
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|||
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Class A common stock, $0.001 par value—200,000,000 shares authorized; 21,700,184 and 19,789,259 shares issued and outstanding as of March 30, 2016 and December 30, 2015, respectively.
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22
|
|
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20
|
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|||
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Class B common stock, $0.001 par value—35,000,000 shares authorized; 14,582,886 and 16,460,741 shares issued and outstanding as of March 30, 2016 and December 30, 2015, respectively.
|
14
|
|
|
16
|
|
|||
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Additional paid-in capital
|
107,590
|
|
|
96,311
|
|
|||
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Retained earnings
|
5,735
|
|
|
4,273
|
|
|||
|
Accumulated other comprehensive loss
|
(6
|
)
|
|
(5
|
)
|
|||
|
Total stockholders' equity attributable to Shake Shack Inc.
|
113,355
|
|
|
100,615
|
|
|||
Non-controlling interests
|
54,063
|
|
|
56,404
|
|
||||
Total equity
|
167,418
|
|
|
157,019
|
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
422,510
|
|
|
$
|
379,547
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|||||
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|
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March 30
2016
|
|
|
April 1
2015
|
|
||
Shack sales
|
$
|
52,153
|
|
|
$
|
36,047
|
|
||
Licensing revenue
|
2,012
|
|
|
1,761
|
|
||||
TOTAL REVENUE
|
54,165
|
|
|
37,808
|
|
||||
Shack-level operating expenses:
|
|
|
|
||||||
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Food and paper costs
|
15,032
|
|
|
11,004
|
|
|||
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Labor and related expenses
|
13,162
|
|
|
9,101
|
|
|||
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Other operating expenses
|
4,919
|
|
|
3,480
|
|
|||
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Occupancy and related expenses
|
4,323
|
|
|
3,183
|
|
|||
General and administrative expenses
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6,884
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|
|
18,385
|
|
||||
Depreciation expense
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3,106
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|
2,191
|
|
||||
Pre-opening costs
|
2,025
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|
1,413
|
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||||
TOTAL EXPENSES
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49,451
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48,757
|
|
||||
OPERATING INCOME (LOSS)
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4,714
|
|
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(10,949
|
)
|
||||
Interest expense, net
|
64
|
|
|
78
|
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
4,650
|
|
|
(11,027
|
)
|
||||
Income tax expense
|
1,299
|
|
|
233
|
|
||||
NET INCOME (LOSS)
|
3,351
|
|
|
(11,260
|
)
|
||||
Less: net income attributable to non-controlling interests
|
1,889
|
|
|
1,408
|
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
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$
|
1,462
|
|
|
$
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(12,668
|
)
|
||
Earnings (loss) per share of Class A common stock:
|
|
|
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||||||
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Basic
|
$
|
0.07
|
|
|
$
|
(1.06
|
)
|
|
|
Diluted
|
$
|
0.07
|
|
|
$
|
(1.06
|
)
|
|
Weighted-average shares of Class A common stock outstanding:
|
|
|
|
||||||
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Basic
|
20,353
|
|
|
11,953
|
|
|||
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Diluted
|
20,812
|
|
|
11,953
|
|
|
|
|
|
Thirteen Weeks Ended
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|
|||||
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|
|
March 30
2016 |
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|
April 1
2015 |
|
||
Net income (loss)
|
$
|
3,351
|
|
|
$
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(11,260
|
)
|
||
Other comprehensive loss:
|
|
|
|
||||||
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Unrealized holding losses on available-for-sale securities
|
(2
|
)
|
|
—
|
|
|||
|
Income tax benefit
|
—
|
|
|
—
|
|
|||
OTHER COMPREHENSIVE LOSS, NET OF TAX
|
(2
|
)
|
|
—
|
|
||||
COMPREHENSIVE INCOME (LOSS)
|
3,349
|
|
|
(11,260
|
)
|
||||
Less: comprehensive income attributable to non-controlling interests
|
1,888
|
|
|
1,408
|
|
||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
|
$
|
1,461
|
|
|
$
|
(12,668
|
)
|
|
|
|
Class A
Common Stock
|
|
Class B
Common Stock
|
|
Additional
Paid-In
Capital
|
|
|
Retained Earnings
|
|
|
Accumulated Other Comprehensive Loss
|
|
|
Non-
Controlling
Interest
|
|
|
Total
Equity
|
|
|||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
BALANCE, DECEMBER 30, 2015
|
19,789,259
|
|
|
$
|
20
|
|
|
16,460,741
|
|
|
$
|
16
|
|
|
$
|
96,311
|
|
|
$
|
4,273
|
|
|
$
|
(5
|
)
|
|
$
|
56,404
|
|
|
$
|
157,019
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
1,462
|
|
|
|
|
1,889
|
|
|
3,351
|
|
|||||||||||||
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Unrealized holding losses on available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||||||
|
Equity-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
1,060
|
|
|
|
|
|
|
|
|
|
|
|
1,060
|
|
||||||||
|
Stock option exercises
|
33,070
|
|
|
—
|
|
|
|
|
|
|
|
|
216
|
|
|
|
|
|
|
|
|
412
|
|
|
628
|
|
|||||||
|
Income tax effect of stock compensation plans
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
1
|
|
|
28
|
|
|||||||
|
Redemption of LLC Interests
|
1,877,855
|
|
|
2
|
|
|
(1,877,855
|
)
|
|
(2
|
)
|
|
4,642
|
|
|
|
|
|
|
|
|
(4,642
|
)
|
|
—
|
|
|||||||
|
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
|
|
|
|
|
|
|
|
|
|
|
|
|
5,334
|
|
|
|
|
|
|
|
|
|
|
|
5,334
|
|
|||||||
BALANCE, MARCH 30, 2016
|
21,700,184
|
|
|
$
|
22
|
|
|
14,582,886
|
|
|
$
|
14
|
|
|
$
|
107,590
|
|
|
$
|
5,735
|
|
|
$
|
(6
|
)
|
|
$
|
54,063
|
|
|
$
|
167,418
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|||||
|
|
|
|
|
|
March 30
2016 |
|
|
April 1
2015 |
|
||
OPERATING ACTIVITIES
|
|
|
|
|||||||||
Net income (loss) (including amounts attributable to non-controlling interests)
|
$
|
3,351
|
|
|
$
|
(11,260
|
)
|
|||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
|||||||||
|
Depreciation expense
|
3,106
|
|
|
2,191
|
|
||||||
|
Equity-based compensation
|
1,030
|
|
|
13,159
|
|
||||||
|
Deferred income taxes
|
3
|
|
|
—
|
|
||||||
|
Non-cash interest expense
|
70
|
|
|
66
|
|
||||||
|
Excess tax benefits on equity-based compensation
|
(28
|
)
|
|
—
|
|
||||||
|
Changes in operating assets and liabilities:
|
|
|
|
||||||||
|
|
Accounts receivable
|
1,019
|
|
|
436
|
|
|||||
|
|
Inventories
|
(78
|
)
|
|
125
|
|
|||||
|
|
Prepaid expenses and other current assets
|
345
|
|
|
(599
|
)
|
|||||
|
|
Other assets
|
(234
|
)
|
|
1,954
|
|
|||||
|
|
Accounts payable
|
561
|
|
|
(255
|
)
|
|||||
|
|
Accrued expenses
|
(89
|
)
|
|
(2,350
|
)
|
|||||
|
|
Accrued wages and related liabilities
|
(2,086
|
)
|
|
173
|
|
|||||
|
|
Other current liabilities
|
202
|
|
|
341
|
|
|||||
|
|
Deferred rent
|
1,354
|
|
|
1,397
|
|
|||||
|
|
Other long-term liabilities
|
(48
|
)
|
|
(202
|
)
|
|||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
8,478
|
|
|
5,176
|
|
|||||||
INVESTING ACTIVITIES
|
|
|
|
|||||||||
Purchases of property and equipment
|
(14,128
|
)
|
|
(8,558
|
)
|
|||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(14,128
|
)
|
|
(8,558
|
)
|
|||||||
FINANCING ACTIVITIES
|
|
|
|
|||||||||
Proceeds from revolving credit facility
|
—
|
|
|
4,000
|
|
|||||||
Payments on revolving credit facility
|
—
|
|
|
(36,000
|
)
|
|||||||
Deferred financing costs
|
—
|
|
|
(92
|
)
|
|||||||
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts, commissions and offering costs
|
—
|
|
|
109,362
|
|
|||||||
Proceeds from issuance of Class B common stock
|
—
|
|
|
30
|
|
|||||||
Member distributions
|
—
|
|
|
(11,125
|
)
|
|||||||
Proceeds from stock option exercises
|
628
|
|
|
—
|
|
|||||||
Employee withholding taxes related to net settled equity awards
|
—
|
|
|
(4,636
|
)
|
|||||||
Excess tax benefits from equity-based compensation
|
28
|
|
|
—
|
|
|||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
656
|
|
|
61,539
|
|
|||||||
INCREASE (DECREASE) IN CASH
|
(4,994
|
)
|
|
58,157
|
|
|||||||
CASH AT BEGINNING OF PERIOD
|
70,849
|
|
|
2,677
|
|
|||||||
CASH AT END OF PERIOD
|
$
|
65,855
|
|
|
$
|
60,834
|
|
|
|
|
Page
|
|
|
|
|
|
March 30, 2016
|
|
|||||||||||||||||||||
|
Cost Basis
|
|
|
Gross Unrealized Gains
|
|
|
Gross Unrealized Losses
|
|
|
Fair Value
|
|
|
Cash and Cash Equivalents
|
|
|
Marketable Securities
|
|
|||||||
Cash
|
$
|
65,800
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65,800
|
|
|
$
|
65,800
|
|
|
$
|
—
|
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Money market funds
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|
55
|
|
|
—
|
|
||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Corporate debt securities
(1)
|
2,397
|
|
|
4
|
|
|
(17
|
)
|
|
2,384
|
|
|
—
|
|
|
2,384
|
|
||||||
Total
|
$
|
68,252
|
|
|
$
|
4
|
|
|
$
|
(17
|
)
|
|
$
|
68,239
|
|
|
$
|
65,855
|
|
|
$
|
2,384
|
|
|
|
December 30, 2015
|
|
|||||||||||||||||||||
|
Cost Basis
|
|
|
Gross Unrealized Gains
|
|
|
Gross Unrealized Losses
|
|
|
Fair Value
|
|
|
Cash and Cash Equivalents
|
|
|
Marketable Securities
|
|
|||||||
Cash
|
$
|
70,816
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,816
|
|
|
$
|
70,816
|
|
|
$
|
—
|
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Money market funds
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
|
—
|
|
||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Corporate debt securities
(1)
|
2,397
|
|
|
1
|
|
|
(12
|
)
|
|
2,386
|
|
|
—
|
|
|
2,386
|
|
||||||
Total
|
$
|
73,246
|
|
|
$
|
1
|
|
|
$
|
(12
|
)
|
|
$
|
73,235
|
|
|
$
|
70,849
|
|
|
$
|
2,386
|
|
(1)
|
Corporate debt securities were measured at fair value using a market approach utilizing observable prices for identical securities or securities with similar characteristics and inputs that are observable or can be corroborated by observable market data.
|
|
March 30
2016 |
|
|
Due within one year
|
$
|
724
|
|
Due after one year through 5 years
|
1,660
|
|
|
Due after 5 years through 10 years
|
—
|
|
|
Due after 10 years
|
—
|
|
|
Total
|
$
|
2,384
|
|
|
|
March 30
2016 |
|
|
December 30
2015 |
|
||
Food
|
$
|
407
|
|
|
$
|
328
|
|
Wine
|
33
|
|
|
30
|
|
||
Beer
|
39
|
|
|
46
|
|
||
Beverages
|
64
|
|
|
57
|
|
||
Retail merchandise
|
78
|
|
|
82
|
|
||
Inventories
|
$
|
621
|
|
|
$
|
543
|
|
|
|
March 30
2016 |
|
|
December 30
2015 |
|
||
Leasehold improvements
|
$
|
89,151
|
|
|
$
|
82,904
|
|
Equipment
|
18,029
|
|
|
16,903
|
|
||
Furniture and fixtures
|
5,492
|
|
|
4,965
|
|
||
Computer equipment and software
|
5,599
|
|
|
5,197
|
|
||
Construction in progress
|
10,633
|
|
|
6,591
|
|
||
Property and equipment, gross
|
128,904
|
|
|
116,560
|
|
||
Less: accumulated depreciation
|
26,625
|
|
|
23,519
|
|
||
Property and equipment, net
|
$
|
102,279
|
|
|
$
|
93,041
|
|
|
|
March 30
2016 |
|
|
December 30
2015 |
|
||
Sales tax payable
|
$
|
1,368
|
|
|
$
|
1,073
|
|
Current portion of liabilities under tax receivable agreement
|
2,159
|
|
|
2,157
|
|
||
Gift card liability
|
768
|
|
|
833
|
|
||
Other
|
731
|
|
|
551
|
|
||
Other current liabilities
|
$
|
5,026
|
|
|
$
|
4,614
|
|
|
|
|
March 30, 2016
|
|
|
December 30, 2015
|
|
||||||
|
LLC Interests
|
|
|
Ownership %
|
|
|
LLC Interests
|
|
|
Ownership %
|
|
Number of LLC Interests held by Shake Shack Inc.
|
21,700,184
|
|
|
59.8
|
%
|
|
19,789,259
|
|
|
54.6
|
%
|
Number of LLC Interests held by non-controlling interest holders
|
14,582,886
|
|
|
40.2
|
%
|
|
16,460,741
|
|
|
45.4
|
%
|
Total LLC Interests outstanding
|
36,283,070
|
|
|
100.0
|
%
|
|
36,250,000
|
|
|
100.0
|
%
|
|
|
Thirteen Weeks Ended
|
|
|||||
|
March 30
2016 |
|
|
April 1
2015 |
|
|||
Comprehensive income (loss) attributable to Shake Shack Inc.
|
$
|
1,461
|
|
|
$
|
(12,668
|
)
|
|
Transfers (to) from non-controlling interests:
|
|
|
|
|||||
|
Increase in additional paid-in capital as a result of the settlement of unit appreciation rights
|
—
|
|
|
987
|
|
||
|
Decrease in additional paid-in as a result of the organizational transactions completed in connection with our IPO
|
—
|
|
|
(75,182
|
)
|
||
|
Increase in additional paid-in capital as a result of the redemption of LLC Interests
|
4,642
|
|
|
—
|
|
||
|
Decrease in additional paid-in capital as a result of contributions made related to equity-based compensation
|
1,060
|
|
|
—
|
|
||
|
Increase in additional paid-in capital as a result of stock option exercises
|
216
|
|
|
—
|
|
||
Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.
|
$
|
7,379
|
|
|
$
|
(86,863
|
)
|
|
|
|
Thirteen Weeks Ended
|
|
|||||
|
|
March 30
2016 |
|
|
April 1
2015 |
|
||
Unit appreciation rights
|
$
|
—
|
|
|
$
|
11,762
|
|
|
Restricted Class B units
|
—
|
|
|
605
|
|
|||
Stock options
|
1,030
|
|
|
792
|
|
|||
Equity-based compensation expense
|
$
|
1,030
|
|
|
$
|
13,159
|
|
|
|
|
|
|
|||||
Total income tax benefit recognized related to equity-based compensation
|
$
|
31
|
|
|
$
|
267
|
|
|
|
Stock
Options
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Outstanding at beginning of period
|
2,574,981
|
|
|
$
|
21.00
|
|
|
|
Granted
|
—
|
|
|
—
|
|
|
|
Exercised
|
(38,081
|
)
|
|
21.00
|
|
|
|
Forfeited
|
(11,525
|
)
|
|
(21.00
|
)
|
|
Outstanding at end of period
|
2,525,375
|
|
|
$
|
21.00
|
|
|
|
Thirteen Weeks Ended
|
|
|||||
|
March 30
2016 |
|
|
April 1
2015 |
|
||
Expected U.S. federal income taxes at statutory rate (34%)
|
$
|
1,581
|
|
|
$
|
(3,749
|
)
|
State and local income taxes, net of federal benefit
|
272
|
|
|
(149
|
)
|
||
Foreign withholding taxes
|
240
|
|
|
116
|
|
||
Non-deductible expenses
|
—
|
|
|
235
|
|
||
Tax credits
|
(39
|
)
|
|
—
|
|
||
Non-controlling interest
|
(755
|
)
|
|
3,780
|
|
||
Other
|
—
|
|
|
—
|
|
||
Income tax expense
|
$
|
1,299
|
|
|
$
|
233
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|||||
|
|
|
March 30
2016 |
|
|
April 1
2015 |
|
||
Numerator:
|
|
|
|
||||||
|
Net income (loss)
|
$
|
3,351
|
|
|
$
|
(11,260
|
)
|
|
|
Less: net income attributable to non-controlling interests
|
1,889
|
|
|
1,408
|
|
|||
|
Net income (loss) attributable to Shake Shack Inc.
|
$
|
1,462
|
|
|
$
|
(12,668
|
)
|
|
Denominator:
|
|
|
|
||||||
|
Weighted-average shares of Class A common stock outstanding—basic
|
20,353
|
|
|
11,953
|
|
|||
|
Effect of dilutive securities:
|
|
|
|
|||||
|
|
Stock options
|
459
|
|
|
—
|
|
||
|
Weighted-average shares of Class A common stock outstanding—diluted
|
20,812
|
|
|
11,953
|
|
|||
|
|
|
|
|
|
||||
Earnings per share of Class A common stock—basic
|
$
|
0.07
|
|
|
$
|
(1.06
|
)
|
||
Earnings per share of Class A common stock—diluted
|
$
|
0.07
|
|
|
$
|
(1.06
|
)
|
|
|
|
Thirteen Weeks Ended
|
||||||
|
|
|
March 30
2016 |
|
April 1
2015 |
||||
Stock options
|
—
|
|
|
|
2,618,281
|
|
(1)
|
||
Shares of Class B common stock
|
14,582,886
|
|
(2)
|
|
24,191,853
|
|
(1)
|
(1)
|
Excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive since we recognized a net loss for the period.
|
(2)
|
Shares of our Class B common stock are considered potentially dilutive shares of Class A common stock. Amounts have been excluded from the computations of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive under the if-converted and two-class methods.
|
|
|
|
Thirteen Weeks Ended
|
|
|||||
|
|
March 30
2016 |
|
|
April 1
2015 |
|
||
Cash paid for:
|
|
|
|
|||||
|
Income taxes, net of refunds
|
$
|
475
|
|
|
$
|
49
|
|
|
Interest, net of amounts capitalized
|
15
|
|
|
149
|
|
||
Non-cash investing activities:
|
|
|
|
|||||
|
Accrued purchases of property and equipment
|
3,133
|
|
|
3,088
|
|
||
|
Capitalized equity-based compensation
|
30
|
|
|
—
|
|
||
|
Class A common stock issued in connection with the acquisition of two former indirect members of SSE Holdings
|
—
|
|
|
6
|
|
||
Non-cash financing activities:
|
|
|
|
|||||
|
Cancellation of Class B common stock in connection with certain organizational transactions completed in connection with our IPO
|
—
|
|
|
(6
|
)
|
||
|
Class A common stock issued in connection with the redemption of LLC Interests
|
2
|
|
|
—
|
|
||
|
Cancellation of Class B common stock in connection with the redemption of LLC Interests
|
(2
|
)
|
|
—
|
|
||
|
Establishment of liabilities under tax receivable agreement
|
34,920
|
|
|
5,600
|
|
|
|
|
|
▪
|
Total revenue
increase
d
43.3%
to
$54.2 million
.
|
▪
|
Shack sales
increase
d
44.7%
to
$52.2 million
.
|
▪
|
Same-Shack sales increased
9.9%
.
|
▪
|
Net
income
was
$1.5 million
, or
$0.07
per diluted share.
|
▪
|
Shack-level operating profit*, a non-GAAP measure,
increase
d
58.6%
to
$14.7 million
, or
28.2%
of Shack sales.
|
▪
|
Adjusted EBITDA*, a non-GAAP measure,
increase
d
54.4%
to
$10.8 million
.
|
▪
|
Adjusted pro forma net
income
*, a non-GAAP measure,
increase
d
114.4%
to
$2.8 million
, or $
0.08
per fully exchanged and diluted share.
|
|
▪
|
Total revenue between $245 million and $249 million (vs. $237 million to $242 million).
|
▪
|
Same-Shack sales growth between 4% and 5% (vs. between 2.5% and 3.0%).
|
▪
|
16 (vs. 13) total new domestic company-operated Shacks to be opened in 2016.
|
▪
|
Seven licensed Shacks to be opened under the Company's current license agreements in the U.K., Middle East and Japan.
|
▪
|
As a percentage of Shack sales, approximately 75 to 100 basis points (vs. 100 to 150 basis points) of deleverage in labor and related expenses on a year-over-year basis.
|
▪
|
Adjusted pro forma effective tax rate between 40% and 41% (vs. 43% and 44%).
|
|
|
|
|
Thirteen Weeks Ended
|
|
|||||||||
(dollar amounts in thousands)
|
March 30, 2016
|
|
|
April 1, 2015
|
|
||||||||
Shack sales
|
$
|
52,153
|
|
96.3
|
%
|
|
$
|
36,047
|
|
95.3
|
%
|
||
Licensing revenue
|
2,012
|
|
3.7
|
%
|
|
1,761
|
|
4.7
|
%
|
||||
TOTAL REVENUE
|
54,165
|
|
100.0
|
%
|
|
37,808
|
|
100.0
|
%
|
||||
Shack-level operating expenses
(1)
:
|
|
|
|
|
|
||||||||
|
Food and paper costs
|
15,032
|
|
28.8
|
%
|
|
11,004
|
|
30.5
|
%
|
|||
|
Labor and related expenses
|
13,162
|
|
25.2
|
%
|
|
9,101
|
|
25.2
|
%
|
|||
|
Other operating expenses
|
4,919
|
|
9.4
|
%
|
|
3,480
|
|
9.7
|
%
|
|||
|
Occupancy and related expenses
|
4,323
|
|
8.3
|
%
|
|
3,183
|
|
8.8
|
%
|
|||
General and administrative expenses
|
6,884
|
|
12.7
|
%
|
|
18,385
|
|
48.6
|
%
|
||||
Depreciation expense
|
3,106
|
|
5.7
|
%
|
|
2,191
|
|
5.8
|
%
|
||||
Pre-opening costs
|
2,025
|
|
3.7
|
%
|
|
1,413
|
|
3.7
|
%
|
||||
TOTAL EXPENSES
|
49,451
|
|
91.3
|
%
|
|
48,757
|
|
129.0
|
%
|
||||
OPERATING INCOME (LOSS)
|
4,714
|
|
8.7
|
%
|
|
(10,949
|
)
|
(29.0
|
)%
|
||||
Interest expense
|
64
|
|
0.1
|
%
|
|
78
|
|
0.2
|
%
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
4,650
|
|
8.6
|
%
|
|
(11,027
|
)
|
(29.2
|
)%
|
||||
Income tax expense
|
1,299
|
|
2.4
|
%
|
|
233
|
|
0.6
|
%
|
||||
NET INCOME (LOSS)
|
3,351
|
|
6.2
|
%
|
|
(11,260
|
)
|
(29.8
|
)%
|
||||
Less: net loss attributable to non-controlling interests
|
1,889
|
|
3.5
|
%
|
|
1,408
|
|
3.7
|
%
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
|
$
|
1,462
|
|
2.7
|
%
|
|
$
|
(12,668
|
)
|
(33.5
|
)%
|
(1)
|
As a percentage of Shack sales.
|
|
|
Thirteen Weeks Ended
|
|
||||||
(dollar amounts in thousands)
|
March 30
2016 |
|
|
April 1
2015 |
|
|||
Shack-level operating profit
|
$
|
14,717
|
|
|
$
|
9,279
|
|
|
Add:
|
|
|
|
|||||
|
Licensing revenue
|
2,012
|
|
|
1,761
|
|
||
Less:
|
|
|
|
|||||
|
General and administrative expenses
|
6,884
|
|
|
18,385
|
|
||
|
Depreciation expense
|
3,106
|
|
|
2,191
|
|
||
|
Pre-opening costs
|
2,025
|
|
|
1,413
|
|
||
Operating income (loss)
|
$
|
4,714
|
|
|
$
|
(10,949
|
)
|
|
|
|
|
|
|
||||
Total revenue
|
$
|
54,165
|
|
|
$
|
37,808
|
|
|
Less: licensing revenue
|
2,012
|
|
|
1,761
|
|
|||
Shack sales
|
$
|
52,153
|
|
|
$
|
36,047
|
|
|
|
|
|
|
|
||||
Shack-level operating profit margin
|
28.2
|
%
|
|
25.7
|
%
|
|
Thirteen Weeks Ended
|
|
||||||
(in thousands)
|
March 30
2016 |
|
|
April 1
2015 |
|
|||
Net income (loss)
|
$
|
3,351
|
|
|
$
|
(11,260
|
)
|
|
Depreciation expense
|
3,106
|
|
|
2,191
|
|
|||
Interest expense, net
|
64
|
|
|
78
|
|
|||
Income tax expense
|
1,299
|
|
|
233
|
|
|||
EBITDA
|
7,820
|
|
|
(8,758
|
)
|
|||
|
|
|
|
|
||||
Equity-based compensation
(1)
|
1,030
|
|
|
792
|
|
|||
Pre-opening costs
(2)
|
1,363
|
|
|
955
|
|
|||
Deferred rent
(3)
|
590
|
|
|
556
|
|
|||
Non-recurring compensation expenses related to the IPO
(4)
|
—
|
|
|
12,818
|
|
|||
IPO-related expenses
(5)
|
—
|
|
|
635
|
|
|||
ADJUSTED EBITDA
|
$
|
10,803
|
|
|
$
|
6,998
|
|
(1)
|
Represents non-cash equity-based compensation expense and relate solely to stock options granted in connection with the IPO.
|
(2)
|
Non-capital expenditures associated with opening new Shacks exclusive of deferred rent incurred prior to opening.
|
(3)
|
Reflects the extent to which our annual rent expense has been above or below our cash rent payments.
|
(4)
|
Non-recurring compensation expense incurred in connection with the IPO, including expense recognized upon settlement of outstanding unit appreciation rights, the related employer withholding taxes and the accelerated vesting of outstanding restricted Class B units.
|
(5)
|
Costs incurred in connection with our initial public offering, including legal, accounting and other related expenses.
|
|
Thirteen Weeks Ended
|
|
|||||||
(in thousands, except per share amounts)
|
March 30
2016 |
|
|
April 1
2015 |
|
||||
Numerator:
|
|
|
|
||||||
|
Net income (loss) attributable to Shake Shack Inc.
|
$
|
1,462
|
|
|
$
|
(12,668
|
)
|
|
|
Adjustments:
|
|
|
|
|||||
|
|
Reallocation of net income attributable to non-controlling interests from the assumed exchange of LLC Interests
(1)
|
1,889
|
|
|
1,408
|
|
||
|
|
Non-recurring compensation expenses incurred in connection with the IPO
(2)
|
—
|
|
|
12,818
|
|
||
|
|
IPO-related expenses
(3)
|
—
|
|
|
635
|
|
||
|
|
Income tax expense
(4)
|
(543
|
)
|
|
(883
|
)
|
||
|
Adjusted pro forma net income
|
$
|
2,808
|
|
|
$
|
1,310
|
|
|
Denominator:
|
|
|
|
||||||
|
Weighted-average shares of Class A common stock outstanding—diluted
|
20,812
|
|
|
11,953
|
|
|||
|
Adjustments:
|
|
|
|
|||||
|
|
Assumed exchange of LLC Interests for shares of Class A common stock
(1)
|
15,900
|
|
|
24,192
|
|
||
|
|
Dilutive effect of stock options
|
—
|
|
|
904
|
|
||
|
Adjusted pro forma fully exchanged weighted-average shares of Class A common stock outstanding—diluted
|
36,712
|
|
|
37,049
|
|
|||
Adjusted pro forma earnings per fully exchanged share—diluted
|
$
|
0.08
|
|
|
$
|
0.04
|
|
(1)
|
Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of non-controlling interests and recognition of net income attributable to non-controlling interests.
|
(2)
|
Non-recurring compensation expense incurred in connection with the IPO, including expense recognized upon settlement of outstanding unit appreciation rights, the related employer withholding taxes and the accelerated vesting of outstanding restricted Class B units.
|
(3)
|
Costs incurred in connection with our initial public offering, including legal, accounting and other related expenses.
|
(4)
|
Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of
39.6%
and
46.0%
for the
thirteen weeks ended
March 30, 2016
and
April 1, 2015
, respectively, which include provisions for U.S. federal income taxes, certain LLC entity-level taxes and foreign withholding taxes, assuming the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction.
|
|
Thirteen Weeks Ended
|
|
|||||
(in thousands)
|
March 30
2016 |
|
|
April 1
2015 |
|
||
Net cash provided by operating activities
|
$
|
8,478
|
|
|
$
|
5,176
|
|
Net cash used in investing activities
|
(14,128
|
)
|
|
(8,558
|
)
|
||
Net cash provided by financing activities
|
656
|
|
|
61,539
|
|
||
Increase (decrease) in cash
|
(4,994
|
)
|
|
58,157
|
|
||
Cash at beginning of period
|
70,849
|
|
|
2,677
|
|
||
Cash at end of period
|
$
|
65,855
|
|
|
$
|
60,834
|
|
|
|
|
|
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed
Herewith
|
||||
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
||
3.1
|
|
Amended and Restated Certificate of Incorporation of Shake Shack Inc., effective February 4, 2015
|
|
8-K
|
|
3.1
|
|
2/10/2015
|
|
|
3.2
|
|
Amended and Restated Bylaws of Shack Shake Inc., dated February 4, 2015
|
|
8-K
|
|
3.2
|
|
2/10/2015
|
|
|
4.1
|
|
Form of Class A Common Stock Certificate
|
|
S-1/A
|
|
4.1
|
|
1/28/2015
|
|
|
10.1
|
†
|
Amendment No. 1 to Shake Shack Inc. 2015 Incentive Award Plan, dated April 26, 2016
|
|
|
|
|
|
|
|
*
|
10.2
|
†
|
Form of Performance Stock Unit Award Agreement, dated April 26, 2016
|
|
|
|
|
|
|
|
*
|
10.3
|
†
|
Form of Supplement to Performance Stock Unit Award Agreement
|
|
|
|
|
|
|
|
*
|
10.4
|
†
|
Employment Agreement, dated as of May 4, 2016, by and between Shake Shack Inc., SSE Holdings, LLC and Ronald Palmese Jr.
|
|
|
|
|
|
|
|
*
|
31.1
|
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
*
|
31.2
|
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
*
|
32
|
#
|
Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
*
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
*
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
*
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
*
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
*
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
*
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
*
|
†
|
Indicates a management contract or compensatory plan or arrangement.
|
#
|
Furnished herewith.
|
|
Shake Shack Inc.
|
|
|
(Registrant)
|
|
|
|
|
Date: May 16, 2016
|
By:
|
/s/ Randy Garutti
|
|
|
Randy Garutti
|
|
|
Chief Executive Officer
(Principal Executive Officer and Duly Authorized Officer)
|
|
|
|
Date: May 16, 2016
|
By:
|
/s/ Jeff Uttz
|
|
|
Jeff Uttz
|
|
|
Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)
|
A.
|
Section 2.41 of the 2015 Incentive Plan is hereby amended and restated in its entirety as follows (with emphasis on added or deleted terms):
|
B.
|
Section 2.42 of the 2015 Incentive Plan is hereby amended and restated in its entirety as follows (with emphasis on added or deleted terms):
|
C.
|
As hereby amended by this Amendment, the 2015 Incentive Plan remains in full force and effect.
|
|
|
|
|
|
|
|
|
/s/ Evan Guillemin
|
|
|
|
|
Name:
|
Evan Guillemin
|
|
|
|
Title:
|
Chair, Compensation Committee
|
|
|
|
|
|
|
|
|
/s/ Jenna Lyons
|
|
|
|
|
Name:
|
Jenna Lyons
|
|
|
|
Title:
|
Compensation Committee
|
|
|
|
|
|
|
|
|
/s/ Jonathan D. Sokoloff
|
|
|
|
|
Name:
|
Jonathan D. Sokoloff
|
|
|
|
Title:
|
Compensation Committee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAKE SHACK INC.
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
Randy Garutti
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANT
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting Date
|
|
[Month] [Day], [Year]
|
[# OF RSUs VESTING] (first anniversary of the Award Date)
|
[Month] [Day], [Year]
|
[# OF RSUs VESTING] (second anniversary of the Award Date)
|
[Month] [Day], [Year]
|
[# OF RSUs VESTING] (third anniversary of the Award Date)
|
|
|
|
|
|
|
|
|
|
|
|
SHAKE SHACK INC.
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
Randy Garutti
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANT
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAKE SHACK
|
|
|
|
|
SHAKE SHACK INC.
|
|
|
|
By:
|
/s/ Jeff Uttz
|
|
|
|
Name:
|
Jeff Uttz
|
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
PARTNERSHIP
|
|
|
|
|
SSE HOLDINGS, LLC
|
|
|
|
By:
|
/s/ Jeff Uttz
|
|
|
|
Name:
|
Jeff Uttz
|
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
EMPLOYEE
|
|
|
|
By:
|
/s/ Ronald Palmese Jr.
|
|
|
|
|
Ronald Palmese, Jr.
|
|
|
|
|
|
|
|
|
|
Residence Address:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended
March 30, 2016
of Shake Shack 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(s) 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 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(s) 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: May 16, 2016
|
|
|
/s/ Randy Garutti
|
|
Randy Garutti
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended
March 30, 2016
of Shake Shack 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(s) 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 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(s) 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: May 16, 2016
|
|
|
/s/ Jeff Uttz
|
|
Jeff Uttz
|
|
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 16, 2016
|
|
|
/s/ Randy Garutti
|
|
Randy Garutti
|
|
Chief Executive Officer and Director
|
Date: May 16, 2016
|
|
|
/s/ Jeff Uttz
|
|
Jeff Uttz
|
|
Chief Financial Officer
|