|
|
(Mark One)
|
|
|||
|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
||
For the fiscal year ended December 27, 2017
|
|||||
OR
|
|||||
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
||
For the transition period from _______ to ______
|
|||||
Commission file number:
001-36823
|
|||||
|
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|
|
Delaware
|
|
47-1941186
|
||
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
||
24 Union Square East, 5th Floor, New York, New York
|
|
10003
|
||
(Address of principal
executive offices)
|
|
(Zip Code)
|
||
(646) 747-7200
|
||||
(Registrant's telephone number, including area code)
|
||||
Securities registered pursuant to Section 12(b) of the Act:
|
||||
Title of each class
|
|
Name of exchange on which registered
|
||
Class A Common Stock, par value $0.001
|
|
New York Stock Exchange
|
||
Securities registered pursuant to Section 12(g) of the Act:
None
|
||||
|
|
|
Large accelerated filer
|
þ
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
|
|
|
Emerging growth company
|
o
|
DOCUMENTS INCORPORATED BY REFERENCE
|
Portions of the registrant’s definitive Proxy Statement for its 2018 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K.
|
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|
▪
|
We amended and restated the limited liability company agreement of SSE Holdings (as amended, the "SSE Holdings LLC Agreement") to, among other things, (i) provide for a new single class of common membership interests in SSE Holdings ("LLC Interests"), (ii) exchange all of the membership interests of the then-existing holders of SSE Holdings for LLC Interests and (iii) appoint Shake Shack as the sole managing member of SSE Holdings;
|
▪
|
We amended and restated our certificate of incorporation to, among other things, (i) provide for Class B common stock with voting rights but no economic interests (where “economic interests” means the right to receive any distributions or dividends, whether cash or stock, in connection with common stock) and (ii) issue shares of Class B common stock to the then-existing members of SSE Holdings on a one-to-one basis with the number of LLC Interests they own;
|
▪
|
We acquired, by merger, two entities that were owned by former indirect members of SSE Holdings, for which we issued
5,968,841
shares of Class A common stock as merger consideration (the "Mergers").
|
|
|
|
Hot Dogs
|
Shake Shack was born from a hot dog cart in 2001 and we believe that our hot dog category gives our guests another premium category from which to choose. Both our beef hot dogs and our chicken dogs are made from 100% all-natural, hormone and antibiotic-free beef and chicken. Our signature Shack-cago Dog
®
is our nod to the classic Chicago-style hot dog, topped with Shack relish, onion, cucumber, pickle, tomato, sport pepper, celery salt and mustard.
|
|
|
Frozen Custard
|
Our premium, dense, rich and creamy ice cream, hand-spun daily on-site, is crafted from our proprietary vanilla and chocolate recipes using only real sugar (no corn syrup) and milk from dairy farmers who pledge not to use artificial growth hormones. Shakes remain our guests' favorite in this category and are scooped and spun to order. Our concretes are made by blending frozen custard at high speed with premium mix-ins. Since each Shake Shack intends to engage its community, each Shack has signature concretes, distinct to its location, that use locally-sourced mix-ins made by artisanal producers whenever possible.
|
|
|
Beer, Wine and Beverages
|
Our proprietary ShackMeister
®
Ale, brewed by Brooklyn Brewery, was specifically crafted to complement the flavor profile of a ShackBurger. At select locations, we also offer local craft beers tailored to each Shack's geography. When it comes to wine, our organic and biodynamic Shack Red
®
and Shack White
®
, grown and bottled exclusively by Frog's Leap Vineyards in Napa Valley, accentuate our fine dining ethos and provide our guests with premium beverage options not commonly found in our industry. In addition, we serve Abita Root Beer, Shack-made Lemonade, organic fresh brewed iced tea, Fifty/Fifty™ (half lemonade, half organic iced tea), Stumptown cold brew coffee, Honest Kids organic apple juice and Shack|
2
0
®
bottled water, from which 1% of the sales supports the clean-up of water sources around the world.
|
|
|
Dogs Are Welcome Too
|
We know that many dog owners treat their four-legged friends as family members. From our first Shack in Madison Square Park, we wanted to include dogs as part of the community gathering experience and developed the "Woof" section on our menu. ShackBurger dog biscuits, peanut butter sauce and vanilla custard make up our signature Pooch-ini
®
, which is available at Shacks with an outdoor space. We also serve dog biscuits to-go, handcrafted exclusively for us by a New York-based bakery.
|
▪
|
BBQ Lineup
— In February 2017 we launched a limited-edition lineup of BBQ items nationwide.
The BBQ ShackMeister Burger is a 100% all-natural Angus beef cheeseburger topped with crispy ShackMeister Ale-marinated shallots and Shack BBQ sauce; the BBQ Chick’n Shack is a crispy 100% all-natural and antibiotic-free chicken breast with Shack BBQ sauce and pickles; and the BBQ Bacon Cheese Fries are crinkle-cut fries topped with all-natural smoked Niman Ranch bacon, Shack BBQ Sauce and cheese sauce.
|
▪
|
Chili Menu
— In October 2017 we rolled out a chili-themed menu at Shacks nationwide, which initially debuted exclusively on the Shack App and subsequently was available for in-Shack ordering. The menu featured a Chili Cheeseburger, a Chili Cheese Dog and Chili Cheese Fries, in which each item is topped with a smoked and slow braised beef chili with ancho and chile de arbol peppers.
|
▪
|
Trio of Featured Shakes
— In 2017 we replaced the Shake of the Week with a trio of featured shakes, offering our guests a new slate of premium shake offerings for extended periods of time. For approximately three months each, we offered a trio of new featured shakes, which included: Mint Cookies & Cream, Salted Vanilla Toffee and Mud Pie; Chocolate Cookies & Cream, Raspberry Cheesecake and Salted Caramel Pretzel; and Frozen Hot Cocoa, Christmas Cookie and Chocolate Peppermint.
|
▪
|
The Salty Donut Concrete
— To celebrate our newly expanded space in the Miami Beach Shack, in May 2017 we had a limited-edition collaboration with The Salty Donut and an exclusive retail collaboration with LYFE Brand. The Salty Donut concrete features a vanilla frozen custard blended with The Salty Donut's Dulce De Leche donut, banana and salted caramel, all topped with The Salted Donut's Mini Chocolate, Chocolate Donut.
|
▪
|
Seasonal Coffee Cake
— In May 2017 the Madison Square Park Shack started serving breakfast daily. In addition to our signature breakfast sandwiches and Shack Apple Turnover, the Madison Square Park Shack offers a special seasonal coffee cake by Daily Provisions, a Union Square Hospitality Group eatery. This exclusive breakfast addition is a sour cream coffee cake made with seasonal fruit and topped with oat and cornmeal crumble.
|
▪
|
Hot Chick'n
—
The Hot Chick’n is a crispy chicken breast dusted with a guajillo and cayenne pepper blend and topped with slaw and pickles, which was offered at Shacks nationwide for a limited time in July 2017. The Hot Chick’n joins the award-winning Chick’n Shack, Shake Shack’s first-ever chicken sandwich that debuted in 2015. The Hot Chick'n debuted early exclusively via the Shack App before being rolled out for in-Shack ordering.
|
▪
|
Shack Everest
— In celebration of Cory Richards and Adrian Ballinger's epic summit of Mount Everest,
we whipped up a custom concrete just for them! The Shack Everest concrete is made as a double, with Mast Brothers dark chocolate chunks with vanilla frozen custard, chocolate sprinkles, whipped cream and topped with an “Everest” sugar cone peak.
|
▪
|
Humm Burger and Patty Shack
— In March 2017 we participated in a two-part collaboration with Chef Daniel Humm of NoMad at select LA Shacks and the NoMad Truck, in which we featured the Humm Burger and the Patty Shack. The Humm Burger, which was
last served at our Decade of Shack celebrations in 2014, is a gruyère cheeseburger topped with applewood smoked bacon, celery relish, Bibb lettuce & truffle mayo, and the Patty Shack is our take on NoMad’s famous chicken burger
—
a black truffle chicken burger with cave-aged Jasper Hill Farm cheddar and gruyère cheese, onion, leek and ShackSauce.
|
▪
|
Golden State Shake
— We collaborated with Nicole Rucker of Rucker's Pie in creating the Golden State Shake — a
blend of vanilla frozen custard, salted honey butter sauce and finely crushed cornflakes topped with whipped cream, inspired by her famous honey cornflake donut. The Golden State Shake was available at all LA Shacks for the month of May.
|
▪
|
SmokeShack Rotolo and Chick'n Parm
— We joined forces with Pizzeria Vetri in September 2017 to bring an exclusive menu to select Philly Shacks, all Philadelphia Pizzeria Vetri locations, the Logan Circle Shack and Pizzeria Vetri 14th Street Corridor. P
laying on our classic SmokeShack, Pizzeria Vetri served up the SmokeShack Rotolo, a new take on their signature rotolo made with ground beef, all-natural smoked Niman Ranch bacon, Shack cheese sauce and chopped cherry pepper. Simultaneously, we offered the Chick’n Parm, a crispy chicken breast topped with Pizzeria Vetri marinara sauce, fresh mozzarella and basil.
|
▪
|
Den Shack
— For one day only, we brought a taste of Tokyo to our Madison Square Park Shack. We teamed up with M
ichelin-starred Chef Zaiyu Hasegawa to offer the Den Shack, an all-natural 100% Angus beef burger topped with applewood-smoked bacon, DEN miso ShackSauce, sansho pepper and house-pickled cucumbers, which was previously exclusive at the Meiji-Jingu Gaien Shack. In addition to the Den Shack, we also offered a Black Sesame Shake, featuring vanilla frozen custard blended with black sesame puree.
|
▪
|
Shake-speare Shake
—
The Upper West Side Shack paid tribute to Free Shakespeare in the Park with a limited-edition shake benefiting The Public Theater. The Shack served the Shake-speare Shake, a strawberry and rose shake topped with whipped cream and fairy dust sprinkles. 100% of the proceeds from the shake benefited The Public Theater’s wide range of programming, including its Free Shakespeare in the Park series, the bedrock of The Public Theater’s dedication to making theater accessible to all. The exclusive Shake-speare offering coincided with The Public Theater’s showing of the beloved comedy
A Midsummer's Night Dream
.
|
▪
|
Shake Shack x Bombas Community Initiative
—
In April 2017, we launched the Shake Shack x Bombas Community Initiative, where team members from Shake Shack and Bombas volunteer each month by donating burgers and socks to a shelter or program in their hometown of NYC. To celebrate the partnership, Bombas brought back its limited-edition Shake Shack x Bombas socks. The premium socks feature Bombas’ innovative sock-tech with their honeycomb arch support system and seamless toes for superior comfort and bold design and were offered at the Shack Shop, select Shake Shack locations and bombas.com for one day.
|
▪
|
Wellness in the Schools Mushroom Burger
—
At our Upper West Side Shack, we partnered with New York Chef Bill Telepan to create the Wellness in the Schools Mushroom Burger, available for one day only in April 2017. The Wellness in the Schools Mushroom Burger is a flat-top griddled mushroom burger topped with swiss cheese, pickled maitake aioli and crispy shallots. 100% of proceeds from the limited-edition burger went to Wellness in the Schools, a non-profit that inspires healthy eating and fitness for kids in public schools.
|
▪
|
Annual British Shake Sale
— We held our 4th Annual British Shake Sale in August 2017
in support of Action Against Hunger. We teamed up with renowned pastry chef Dominique Ansel – named World’s Best Pastry Chef 2017 – and Dominique Ansel Bakery London to introduce a new limited-edition shake for the occasion, The Banoffee. The Banoffee features fresh, hand-spun vanilla custard blended with caramelized bananas, Dulce de Leche, Speculoos biscuits and a hint of sea salt, topped with Chantilly cream and Speculoos crumbles. Anyone who visited a Shack and donated £2 or more to Action Against Hunger in August, received a voucher for a complimentary hand-spun shake on their next visit. The 4th Great British Shake Sale followed the record breaking success of our Great American Shake Sale in the U.S. which was held in May 2017.
|
▪
|
Momofuku Pop-Up
– For one day only in January 2017, we hosted a pop-up in Toronto at Momofuku Daisho, the first-ever taste of Shake Shack in Canada. We served up ShackBurgers and crinkle cut fries while Momofuku selected beverages from Steam Whistle Brewery and Norman Hardie Winery and Vineyard to pair with guests' burgers and fries. Additionally, $1 from every order was donated to SickKids Foundation contributing to child health research, learning and care.
|
▪
|
St. Louis Porano Pasta Pop-Up
– In anticipation of our first Shack opening in St. Louis, we held a pop-up with Porano Pasta of Niche Food Group. We partnered with Chef Matthew Rice of Niche Food Group and created butterscotch frozen custard banana-oat cookie sandwich just for the occasion. Additionally, we partnered with local illustrator, Adam Koon, to create a whimsical piece showcasing beloved historical landmarks around the city. Guests in attendance received a free limited-edition tote bag featuring the illustration as a token of our appreciation.
|
▪
|
EMP Summer House
– For one weekend in August, we served lunch on the patio of EMP Summer House in East Hampton, offering up classics like the ShackBurger, Bacon Double Cheeseburger and crinkle cut fries along with Hamptons-inspired specialty items like the CLAMBurger and Lobster Shack. We also offered up this exclusive menu at the Madison Square Park Shack during the same weekend, serving up the Lobster Shack.
|
▪
|
Our total revenue grew from
$82.5 million
in fiscal 2013 to
$358.8 million
in fiscal
2017
, a
44%
CAGR. Compared to fiscal
2016
, total revenue increased
33.6%
in fiscal
2017
.
|
▪
|
Net loss attributable to Shake Shack Inc. for fiscal
2017
was
$0.3 million
, compared to income of
$12.4 million
for fiscal
2016
.
|
▪
|
Adjusted pro forma net
income
, a non-GAAP measure,
increase
d
25.4%
to
$21.0 million
, or
$0.57
per fully exchanged and diluted share in fiscal
2017
, compared to
$16.8 million
, or
$0.46
per fully exchanged and diluted share in fiscal
2016
.
For a reconciliation of adjusted pro forma, a non-GAAP measure, to net
income (loss)
attributable to Shake Shack Inc., see "Non-GAAP Financial Measures—Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share" in Part II, Item 7.
|
•
|
Adjusted EBITDA, a non-GAAP measure, increased
29%
to
$64.7 million
for fiscal
2017
from
$50.2 million
for fiscal
2016
. For a reconciliation of Adjusted EBITDA to net income, see "Non-GAAP Financial Measures—EBITDA and Adjusted EBITDA" in Part II, Item 7.
|
|
|
(1)
|
System-wide sales consists of sales from our domestic company-operated Shacks, our domestic licensed Shacks and our international licensed Shacks. We do not recognize the sales from our licensed Shacks as revenue. Of these amounts, our revenue is limited to Shack sales from domestic company-operated Shacks and licensing revenue based on a percentage of sales from domestic and international licensed Shacks. Our total revenue also includes certain up-front fees such as territory fees and opening fees we receive in connection with our licensing arrangements.
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
Randy Garutti
|
|
42
|
|
Chief Executive Officer and Director
|
Tara Comonte
|
|
43
|
|
Chief Financial Officer
|
Zachary Koff
|
|
38
|
|
Chief Operating Officer
|
|
|
▪
|
opening new domestic company-operated Shacks;
|
▪
|
capitalizing on our outsized brand awareness;
|
▪
|
innovating our digital products and capabilities;
|
▪
|
growing same-Shack sales; and
|
▪
|
thoughtfully increasing our licensed Shacks, both domestically and abroad.
|
▪
|
the identification and availability of attractive sites for new Shacks;
|
▪
|
difficulty negotiating suitable lease terms;
|
▪
|
shortages of construction labor or materials;
|
▪
|
recruitment and training of qualified personnel in the local market;
|
▪
|
our ability to obtain all required governmental permits, including zonal approvals;
|
▪
|
our ability to control construction and development costs of new Shacks;
|
▪
|
competition in new markets, including competition for appropriate sites;
|
▪
|
failure of the landlords to timely deliver real estate to us and other landlord delays;
|
▪
|
the proximity of potential sites to an existing Shack, and the impact of cannibalization on future growth;
|
▪
|
anticipated commercial, residential and infrastructure development near our new Shacks; and
|
▪
|
the cost and availability of capital to fund construction costs and pre-opening costs.
|
|
|
▪
|
food safety concerns, including food tampering or contamination;
|
▪
|
food-borne illness incidents;
|
▪
|
the safety of the food commodities we use, particularly beef;
|
▪
|
guest injury;
|
▪
|
security breaches of confidential guest or employee information;
|
▪
|
third-party service providers, particularly related to delivery services and information technology, and potential guest dissatisfaction from circumstances out of our control relating to third-party service providers;
|
▪
|
employment-related claims relating to alleged employment discrimination, wage and hour violations, labor standards or health care and benefit issues; or
|
▪
|
government or industry findings concerning our Shacks, restaurants operated by other food service providers or others across the food industry supply chain.
|
▪
|
changes in foreign currency exchange rates or currency restructurings and hyperinflation or deflation in the countries in which we operate;
|
▪
|
the imposition of restrictions on currency conversion or the transfer of funds or limitations on our ability to repatriate non-U.S. earnings in a tax effective manner;
|
▪
|
the presence and acceptance of varying levels of business corruption in international markets;
|
▪
|
the ability to comply with, or impact of complying with, complex and changing laws, regulations and policies of foreign governments that may affect investments or operations, including foreign ownership restrictions, import and export controls, tariffs, embargoes, intellectual property, licensing requirements and regulations, increase in taxes paid and other changes in applicable tax laws;
|
▪
|
the difficulties involved in managing an organization doing business in many different countries;
|
▪
|
the ability to comply with, or impact of complying with, complex and changing laws, regulations and economic political policies of the U.S. government, including U.S. laws and regulations relating to economic sanctions, export controls and anti-boycott requirements;
|
▪
|
increase in an anti-American sentiment and the identification of the licensed brand as an American brand;
|
▪
|
the effect of disruptions caused by severe weather, natural disasters, outbreak of disease or other events that make travel to a particular region less attractive or more difficult; and
|
▪
|
political and economic instability.
|
|
▪
|
nutritional content labeling and disclosure requirements;
|
▪
|
food safety regulations;
|
▪
|
local licensure, building and zoning regulations;
|
▪
|
employment regulations;
|
▪
|
the Affordable Care Act;
|
▪
|
the Americans with Disabilities Act and similar state laws;
|
▪
|
privacy and cybersecurity;
|
▪
|
laws and regulations related to our licensed operations; and
|
▪
|
U.S. Foreign Corrupt Practices Act and other similar anti-bribery and anti-kickback laws;
|
▪
|
changes in the valuation of our deferred tax assets and liabilities;
|
▪
|
expected timing and amount of the release of any tax valuation allowance;
|
▪
|
tax effects of stock-based compensation;
|
▪
|
changes in tax laws, regulations or interpretations thereof, including the Tax Cuts and Jobs Act that was enacted in December 2017; or
|
▪
|
future earnings being lower than anticipated in jurisdictions where we have lower statutory tax rates and higher than anticipated earnings in jurisdictions where we have higher statutory tax rates.
|
|
▪
|
authorizing the issuance of "blank check" preferred stock that could be issued by our Board of Directors to increase the number of outstanding shares and thwart a takeover attempt;
|
▪
|
establishing a classified board of directors so that not all members of our Board of Directors are elected at one time;
|
▪
|
the removal of directors only for cause;
|
▪
|
prohibiting the use of cumulative voting for the election of directors;
|
▪
|
limiting the ability of stockholders to call special meetings or amend our bylaws;
|
▪
|
requiring all stockholder actions to be taken at a meeting of our stockholders; and
|
▪
|
establishing advance notice and duration of ownership requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
|
|
|
Company
Operated
|
|
|
Licensed
|
|
|
Total
|
|
Arizona
|
3
|
|
|
—
|
|
|
3
|
|
California
|
7
|
|
|
1
|
|
|
8
|
|
Connecticut
|
3
|
|
|
—
|
|
|
3
|
|
Delaware
|
1
|
|
|
—
|
|
|
1
|
|
District of Columbia
|
6
|
|
|
1
|
|
|
7
|
|
Florida
|
6
|
|
|
—
|
|
|
6
|
|
Georgia
|
2
|
|
|
—
|
|
|
2
|
|
Illinois
|
4
|
|
|
—
|
|
|
4
|
|
Kentucky
|
1
|
|
|
—
|
|
|
1
|
|
Maryland
|
3
|
|
|
1
|
|
|
4
|
|
Massachusetts
|
5
|
|
|
—
|
|
|
5
|
|
Michigan
|
2
|
|
|
—
|
|
|
2
|
|
Minnesota
|
1
|
|
|
—
|
|
|
1
|
|
Missouri
|
1
|
|
|
—
|
|
|
1
|
|
Nevada
|
4
|
|
|
1
|
|
|
5
|
|
New Jersey
|
4
|
|
|
—
|
|
|
4
|
|
New York
|
23
|
|
|
4
|
|
|
27
|
|
Pennsylvania
|
4
|
|
|
1
|
|
|
5
|
|
Texas
|
7
|
|
|
1
|
|
|
8
|
|
Virginia
|
2
|
|
|
—
|
|
|
2
|
|
Wisconsin
|
1
|
|
|
—
|
|
|
1
|
|
Domestic
|
90
|
|
|
10
|
|
|
100
|
|
Bahrain
|
—
|
|
|
2
|
|
|
2
|
|
Japan
|
—
|
|
|
6
|
|
|
6
|
|
Korea
|
—
|
|
|
5
|
|
|
5
|
|
Kuwait
|
—
|
|
|
8
|
|
|
8
|
|
Oman
|
—
|
|
|
1
|
|
|
1
|
|
Qatar
|
—
|
|
|
4
|
|
|
4
|
|
Russia
|
—
|
|
|
3
|
|
|
3
|
|
Saudi Arabia
|
—
|
|
|
7
|
|
|
7
|
|
Turkey
|
—
|
|
|
3
|
|
|
3
|
|
United Arab Emirates
|
—
|
|
|
12
|
|
|
12
|
|
United Kingdom
|
—
|
|
|
8
|
|
|
8
|
|
INTERNATIONAL
|
—
|
|
|
59
|
|
|
59
|
|
SYSTEM-WIDE
|
90
|
|
|
69
|
|
|
159
|
|
|
|
2017
|
|
|
2016
|
|
||||||||||
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
||||
First Quarter
|
$
|
39.70
|
|
|
$
|
30.36
|
|
|
$
|
43.99
|
|
|
$
|
30.00
|
|
Second Quarter
|
$
|
39.57
|
|
|
$
|
32.07
|
|
|
$
|
38.96
|
|
|
$
|
33.10
|
|
Third Quarter
|
$
|
35.78
|
|
|
$
|
30.12
|
|
|
$
|
42.94
|
|
|
$
|
33.76
|
|
Fourth Quarter
|
$
|
46.90
|
|
|
$
|
32.25
|
|
|
$
|
39.51
|
|
|
$
|
30.90
|
|
|
|
|
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
|
Number of securities remaining available for future issuances under equity compensation plans
|
|
|
Equity compensation plans approved by security holders
(1)
|
|
1,888,659
|
|
|
$
|
21.16
|
|
|
3,434,919
|
|
(1)
|
Includes awards granted and available to be granted under our 2015 Incentive Award Plan.
|
|
|
1/30/2015
|
|
|
7/1/2015
|
|
|
12/30/2015
|
|
|
6/29/2016
|
|
|
12/28/2016
|
|
|
6/28/2017
|
|
|
12/27/2017
|
|
|||||||
Shake Shack Inc.
|
$
|
100.00
|
|
|
$
|
130.81
|
|
|
$
|
87.06
|
|
|
$
|
80.22
|
|
|
$
|
80.24
|
|
|
$
|
77.65
|
|
|
$
|
96.60
|
|
S&P 500 Index
|
100.00
|
|
|
104.36
|
|
|
104.52
|
|
|
108.53
|
|
|
117.02
|
|
|
127.95
|
|
|
142.57
|
|
|||||||
S&P 600 Restaurants Index
|
100.00
|
|
|
101.86
|
|
|
89.60
|
|
|
88.03
|
|
|
94.50
|
|
|
91.16
|
|
|
91.75
|
|
(dollar amounts in thousands, except per share amounts)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
(1)
|
|
|
2013
|
|
|||||||
Selected statement of income data:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Shack sales
|
$
|
346,388
|
|
|
$
|
259,350
|
|
|
$
|
183,219
|
|
|
$
|
112,042
|
|
|
$
|
78,587
|
|
||
Licensing revenue
|
12,422
|
|
|
9,125
|
|
|
7,373
|
|
|
6,488
|
|
|
3,869
|
|
|||||||
Shack-level operating expenses
|
254,079
|
|
|
186,058
|
|
|
130,345
|
|
|
85,181
|
|
|
58,168
|
|
|||||||
General and administrative expenses
|
39,003
|
|
|
30,556
|
|
|
37,825
|
|
|
18,187
|
|
|
12,453
|
|
|||||||
Pre-opening costs
|
9,603
|
|
|
9,520
|
|
|
5,430
|
|
|
6,105
|
|
|
2,334
|
|
|||||||
Operating income
|
33,813
|
|
|
27,805
|
|
|
6,753
|
|
|
3,143
|
|
|
5,935
|
|
|||||||
Net income
|
8,884
|
|
|
22,146
|
|
|
3,124
|
|
|
2,118
|
|
|
5,423
|
|
|||||||
Net income (loss) attributable to Shake Shack Inc.
|
(320
|
)
|
|
12,446
|
|
|
(8,776
|
)
|
|
2,118
|
|
|
5,423
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Per share data:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) per share—basic
|
$
|
(0.01
|
)
|
|
$
|
0.54
|
|
|
$
|
(0.65
|
)
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
||
Earnings (loss) per share—diluted
|
$
|
(0.01
|
)
|
|
$
|
0.53
|
|
|
$
|
(0.65
|
)
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selected balance sheet data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
21,507
|
|
|
$
|
11,607
|
|
|
$
|
70,849
|
|
|
$
|
2,677
|
|
|
$
|
13,076
|
|
||
Short-term marketable securities
|
63,036
|
|
|
62,040
|
|
|
275
|
|
|
—
|
|
|
—
|
|
|||||||
Total current assets
|
93,199
|
|
|
83,944
|
|
|
78,934
|
|
|
7,925
|
|
|
15,207
|
|
|||||||
Total assets
|
470,606
|
|
|
538,194
|
|
|
379,547
|
|
|
82,962
|
|
|
55,219
|
|
|||||||
Total current liabilities
|
34,024
|
|
|
31,716
|
|
|
24,005
|
|
|
48,177
|
|
|
7,205
|
|
|||||||
Total debt
|
14,518
|
|
|
2,007
|
|
|
313
|
|
|
32,313
|
|
|
313
|
|
|||||||
Total liabilities
|
246,127
|
|
|
336,841
|
|
|
222,528
|
|
|
70,362
|
|
|
17,832
|
|
|||||||
Total equity
|
224,479
|
|
|
201,353
|
|
|
157,019
|
|
|
12,600
|
|
|
37,387
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selected cash flow data:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by operating activities
|
$
|
70,878
|
|
|
$
|
54,285
|
|
|
$
|
41,258
|
|
|
$
|
13,584
|
|
|
$
|
12,924
|
|
||
Net cash used in investing activities
|
(61,943
|
)
|
|
(114,761
|
)
|
|
(34,514
|
)
|
|
(28,515
|
)
|
|
(16,194
|
)
|
|||||||
Net cash provided by financing activities
|
965
|
|
|
1,234
|
|
|
61,428
|
|
|
4,532
|
|
|
313
|
|
(dollar amounts in thousands)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
(1)
|
|
|
2013
|
|
|||||||
Selected operating data:
|
|
|
|
|
|
|
|
|
|
||||||||||||
System-wide sales
(2)
|
$
|
532,137
|
|
|
$
|
402,791
|
|
|
$
|
295,257
|
|
|
$
|
217,442
|
|
|
$
|
139,903
|
|
||
Same-Shack sales growth
(3)
|
(1.2
|
)%
|
|
4.2
|
%
|
|
13.3
|
%
|
|
4.1
|
%
|
|
5.9
|
%
|
|||||||
Shacks in the comparable base
|
43
|
|
|
29
|
|
|
21
|
|
|
13
|
|
|
8
|
|
|||||||
Average weekly sales
(4)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Domestic company-operated
|
$
|
88
|
|
|
$
|
96
|
|
|
$
|
96
|
|
|
$
|
89
|
|
|
$
|
96
|
|
|
Average unit volumes
(5)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Domestic company-operated
|
$
|
4,598
|
|
|
$
|
4,981
|
|
|
$
|
4,976
|
|
|
$
|
4,611
|
|
|
$
|
5,017
|
|
|
|
International licensed
|
$
|
3,176
|
|
|
$
|
3,334
|
|
|
$
|
3,413
|
|
|
$
|
4,588
|
|
|
$
|
6,077
|
|
|
Shack-level operating profit
(6)
|
$
|
92,309
|
|
|
$
|
73,292
|
|
|
$
|
52,874
|
|
|
$
|
26,861
|
|
|
$
|
20,419
|
|
||
Shack-level operating profit margin
(6)
|
26.6
|
%
|
|
28.3
|
%
|
|
28.9
|
%
|
|
24.0
|
%
|
|
26.0
|
%
|
|||||||
Adjusted EBITDA
(7)
|
$
|
64,664
|
|
|
$
|
50,234
|
|
|
$
|
37,011
|
|
|
$
|
14,862
|
|
|
$
|
12,722
|
|
||
Adjusted EBITDA margin
(7)
|
18.0
|
%
|
|
18.7
|
%
|
|
19.4
|
%
|
|
12.5
|
%
|
|
15.4
|
%
|
|||||||
Shack counts (at end of period):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
System-wide
|
159
|
|
|
114
|
|
|
84
|
|
|
63
|
|
|
40
|
|
||||||
|
Domestic company-operated
|
90
|
|
|
64
|
|
|
44
|
|
|
31
|
|
|
21
|
|
||||||
|
Domestic licensed
|
10
|
|
|
7
|
|
|
5
|
|
|
5
|
|
|
4
|
|
||||||
|
International licensed
|
59
|
|
|
43
|
|
|
35
|
|
|
27
|
|
|
15
|
|
(1)
|
We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year. Fiscal 2017, 2016, 2015 and 2013 each contained 52 weeks. Fiscal 2014 was a 53-week year with the extra operating week (the "53rd week") falling in our fiscal fourth quarter.
|
(2)
|
System-wide sales consists of sales from our domestic company-operated Shacks, our domestic licensed Shacks and our international licensed Shacks. We do not recognize the sales from our licensed Shacks as revenue. Of these amounts, our revenue is limited to Shack sales from domestic company-operated Shacks and licensing revenue based on a percentage of sales from domestic and international licensed Shacks, as well as certain up-front fees such as territory fees and opening fees.
|
(3)
|
Same-Shack sales growth reflects the change in year-over-year Shack sales for domestic company-operated Shacks open for 24 full fiscal months or longer. Same-Shack sales growth for fiscal 2014 excludes sales from the 53rd week.
|
(4)
|
Average weekly sales is calculated by dividing total Shack sales by the number of operating weeks for all Shacks in operation during the period. For Shacks that are not open for the entire period, fractional adjustments are made to the number of operating weeks used in the denominator such that it corresponds to the period of associated sales.
|
(5)
|
Average unit volumes ("AUVs") are calculated by dividing total Shack sales by the number of Shacks open during the period. For Shacks that are not open for the entire period, fractional adjustments are made to the number of Shacks used in the denominator such that it corresponds to the period of associated sales.
|
(6)
|
See "Non-GAAP Measures—Shack-Level Operating Profit" on page 58 for additional information and a reconciliation to the most directly comparable GAAP financial measure.
|
(7)
|
See "Non-GAAP Measures—EBITDA and Adjusted EBITDA" on page 59 for additional information and a reconciliation to the most directly comparable GAAP financial measure.
|
|
|
▪
|
Total revenue increased
33.6%
to
$358.8 million
.
|
▪
|
Shack sales increased
33.6%
to
$346.4 million
.
|
▪
|
Same-Shack sales decreased
1.2%
.
|
▪
|
Operating income
increase
d
21.6%
to
$33.8 million
, or
9.4%
of total revenue.
|
▪
|
Shack-level operating profit margin*, a non-GAAP measure,
increase
d
25.9%
to
$92.3 million
, or
26.6%
of Shack sales.
|
▪
|
Net income was
$8.9 million
and net
loss
attributable to Shake Shack Inc. was
$0.3 million
, or
$(0.01)
per diluted share.
|
▪
|
Adjusted EBITDA*, a non-GAAP measure, increased
28.7%
to
$64.7 million
.
|
▪
|
Adjusted pro forma net
income
*, a non-GAAP measure,
increase
d
25.4%
to
$21.0 million
, or
$0.57
per fully exchanged and diluted share.
|
▪
|
45
net system-wide Shack openings, including
26
domestic company-operated Shacks and
19
net licensed Shacks, representing a
39.5%
increase in system-wide Shack count.
|
|
|
|
Current Outlook
|
Total revenue (inclusive of licensing revenue)
|
$444 to $448 million
|
Licensing revenue
|
$12 to $13 million
|
Same-Shack sales growth (%)
(1)
|
0%
|
Domestic company-operated Shack openings
|
32 to 35
|
Licensed Shack openings, net
|
16 to 18
|
Average annual sales volume for domestic company-operated Shacks
|
$4.1 to $4.2 million
|
Shack-level operating profit margin (%)
|
24.5% to 25.5%
|
General and administrative expenses
(2)
|
$49 to $51 million
|
Depreciation expense
|
$32 million
|
Pre-opening costs
|
$12 to $13 million
|
Interest expense
|
$2 to $2.2 million
|
Adjusted pro forma effective tax rate (%)
|
26% to 27%
|
(1)
|
Includes approximately
1.5% to 2%
of menu price increases taken in December 2017.
|
(2)
|
Excludes approximately
$4 to $6 million
of estimated costs related to Project Concrete, our operational and financial systems upgrade initiative.
|
|
▪
|
At least 200 domestic company-operated Shacks and at least 120 globally licensed Shacks (more than double the system-wide Shack count as of December 27, 2017); and
|
▪
|
Over $700 million in total revenue.
|
|
(dollar amounts in thousands)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||||||||||
Shack sales
|
$
|
346,388
|
|
96.5
|
%
|
|
$
|
259,350
|
|
96.6
|
%
|
|
$
|
183,219
|
|
96.1
|
%
|
||
Licensing revenue
|
12,422
|
|
3.5
|
%
|
|
9,125
|
|
3.4
|
%
|
|
7,373
|
|
3.9
|
%
|
|||||
TOTAL REVENUE
|
358,810
|
|
100.0
|
%
|
|
268,475
|
|
100.0
|
%
|
|
190,592
|
|
100.0
|
%
|
|||||
Shack-level operating expenses
(1)
:
|
|
|
|
|
|
|
|
|
|||||||||||
|
Food and paper costs
|
98,337
|
|
28.4
|
%
|
|
73,752
|
|
28.4
|
%
|
|
54,079
|
|
29.5
|
%
|
||||
|
Labor and related expenses
|
91,740
|
|
26.5
|
%
|
|
65,540
|
|
25.3
|
%
|
|
44,752
|
|
24.4
|
%
|
||||
|
Other operating expenses
|
35,805
|
|
10.3
|
%
|
|
24,946
|
|
9.6
|
%
|
|
16,307
|
|
8.9
|
%
|
||||
|
Occupancy and related expenses
|
28,197
|
|
8.1
|
%
|
|
21,820
|
|
8.4
|
%
|
|
15,207
|
|
8.3
|
%
|
||||
General and administrative expenses
|
39,003
|
|
10.9
|
%
|
|
30,556
|
|
11.4
|
%
|
|
37,825
|
|
19.8
|
%
|
|||||
Depreciation expense
|
21,704
|
|
6.0
|
%
|
|
14,502
|
|
5.4
|
%
|
|
10,222
|
|
5.4
|
%
|
|||||
Pre-opening costs
|
9,603
|
|
2.7
|
%
|
|
9,520
|
|
3.5
|
%
|
|
5,430
|
|
2.8
|
%
|
|||||
Loss on disposal of property and equipment
|
608
|
|
0.2
|
%
|
|
34
|
|
—
|
%
|
|
17
|
|
—
|
%
|
|||||
TOTAL EXPENSES
|
324,997
|
|
90.6
|
%
|
|
240,670
|
|
89.6
|
%
|
|
183,839
|
|
96.5
|
%
|
|||||
OPERATING INCOME
|
33,813
|
|
9.4
|
%
|
|
27,805
|
|
10.4
|
%
|
|
6,753
|
|
3.5
|
%
|
|||||
Other income, net
|
128,123
|
|
35.7
|
%
|
|
1,065
|
|
0.4
|
%
|
|
7
|
|
—
|
%
|
|||||
Interest expense
|
(1,643
|
)
|
(0.5
|
)%
|
|
(374
|
)
|
(0.1
|
)%
|
|
(332
|
)
|
(0.2
|
)%
|
|||||
INCOME BEFORE INCOME TAXES
|
160,293
|
|
44.7
|
%
|
|
28,496
|
|
10.6
|
%
|
|
6,428
|
|
3.4
|
%
|
|||||
Income tax expense
|
151,409
|
|
42.2
|
%
|
|
6,350
|
|
2.4
|
%
|
|
3,304
|
|
1.7
|
%
|
|||||
NET INCOME
|
8,884
|
|
2.5
|
%
|
|
22,146
|
|
8.2
|
%
|
|
3,124
|
|
1.6
|
%
|
|||||
Less: net income attributable to non-controlling interests
|
9,204
|
|
2.6
|
%
|
|
9,700
|
|
3.6
|
%
|
|
11,900
|
|
6.2
|
%
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
|
$
|
(320
|
)
|
(0.1
|
)%
|
|
$
|
12,446
|
|
4.6
|
%
|
|
$
|
(8,776
|
)
|
(4.6
|
)%
|
|
(dollar amounts in thousands)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
(1)
|
|
|
2013
|
|
|||||||
Operating income
|
$
|
33,813
|
|
|
$
|
27,805
|
|
|
$
|
6,753
|
|
|
$
|
3,143
|
|
|
$
|
5,935
|
|
||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Licensing revenue
|
12,422
|
|
|
9,125
|
|
|
7,373
|
|
|
6,488
|
|
|
3,869
|
|
||||||
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
General and administrative expenses
|
39,003
|
|
|
30,556
|
|
|
37,825
|
|
|
18,187
|
|
|
12,453
|
|
||||||
|
Depreciation expense
|
21,704
|
|
|
14,502
|
|
|
10,222
|
|
|
5,809
|
|
|
3,541
|
|
||||||
|
Pre-opening costs
|
9,603
|
|
|
9,520
|
|
|
5,430
|
|
|
6,105
|
|
|
2,334
|
|
||||||
|
Loss on disposal of property and equipment
|
608
|
|
|
34
|
|
|
17
|
|
|
105
|
|
|
25
|
|
||||||
Shack-level operating profit
|
$
|
92,309
|
|
|
$
|
73,292
|
|
|
$
|
52,874
|
|
|
$
|
26,861
|
|
|
$
|
20,419
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total revenue
|
$
|
358,810
|
|
|
$
|
268,475
|
|
|
$
|
190,592
|
|
|
$
|
118,530
|
|
|
$
|
82,456
|
|
||
Less: Licensing revenue
|
12,422
|
|
|
9,125
|
|
|
7,373
|
|
|
6,488
|
|
|
3,869
|
|
|||||||
Shack sales
|
$
|
346,388
|
|
|
$
|
259,350
|
|
|
$
|
183,219
|
|
|
$
|
112,042
|
|
|
$
|
78,587
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shack-level operating profit margin
|
26.6
|
%
|
|
28.3
|
%
|
|
28.9
|
%
|
|
24.0
|
%
|
|
26.0
|
%
|
(1)
|
We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year.
Fiscal 2017, 2016, 2015 and 2013 each contained 52 weeks.
Fiscal 2014 was a 53-week year.
|
(in thousands)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
(1)
|
|
|
2013
|
|
|||||||
Net income
|
$
|
8,884
|
|
|
$
|
22,146
|
|
|
$
|
3,124
|
|
|
$
|
2,118
|
|
|
$
|
5,423
|
|
||
Depreciation expense
|
21,704
|
|
|
14,502
|
|
|
10,222
|
|
|
5,809
|
|
|
3,541
|
|
|||||||
Interest expense, net
|
1,565
|
|
|
285
|
|
|
325
|
|
|
363
|
|
|
52
|
|
|||||||
Income tax expense
|
151,409
|
|
|
6,350
|
|
|
3,304
|
|
|
662
|
|
|
460
|
|
|||||||
EBITDA
|
183,562
|
|
|
43,283
|
|
|
16,975
|
|
|
8,952
|
|
|
9,476
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity-based compensation
|
5,623
|
|
|
5,354
|
|
|
4,314
|
|
|
165
|
|
|
93
|
|
|||||||
Deferred compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,054
|
|
|||||||
Deferred rent
|
983
|
|
|
2,251
|
|
|
1,482
|
|
|
2,830
|
|
|
975
|
|
|||||||
Loss on disposal of property and equipment
|
608
|
|
|
34
|
|
|
17
|
|
|
105
|
|
|
25
|
|
|||||||
Non-recurring compensation expenses related to the IPO
(2)
|
—
|
|
|
—
|
|
|
12,818
|
|
|
—
|
|
|
—
|
|
|||||||
IPO-related expenses
|
—
|
|
|
—
|
|
|
635
|
|
|
2,675
|
|
|
—
|
|
|||||||
Legal settlement
|
—
|
|
|
—
|
|
|
770
|
|
|
—
|
|
|
—
|
|
|||||||
Executive transition costs
(3)
|
664
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Project Concrete
(4)
|
181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Home Office relocation expenses
(5)
|
264
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other income related to adjustment of liabilities under tax receivable agreement
|
(1,362
|
)
|
|
(688
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other income related to adjustment of liabilities under tax receivable agreement resulting from the enactment of the TCJA
|
(125,859
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other non-cash items
|
—
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
99
|
|
|||||||
ADJUSTED EBITDA
|
$
|
64,664
|
|
|
$
|
50,234
|
|
|
$
|
37,011
|
|
|
$
|
14,862
|
|
|
$
|
12,722
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA margin
|
18.0
|
%
|
|
18.7
|
%
|
|
19.4
|
%
|
|
12.5
|
%
|
|
15.4
|
%
|
(1)
|
We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year. Fiscal 2017, 2016, 2015 and 2013 each contained 52 weeks. Fiscal 2014 was a 53-week year.
|
(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.
See
Note 13
to the consolidated financial statements included in Item 8 of this Form 10-K.
|
(3)
|
Represents fees paid to an executive recruiting firm, a non-recurring signing bonus and certain other benefits paid upon the hiring of our chief financial officer.
|
(4)
|
Represents consulting and advisory fees related to our operational and financial system upgrade initiative called Project Concrete.
|
(1)
|
We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year. Fiscal 2017, 2016 and 2015 each contained 52 weeks. Fiscal 2014 was a 53-week year.
|
(2)
|
Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income attributable to non-controlling interests.
|
(3)
|
Non-recurring compensation expense incurred in connection with the IPO. Includes expense recognized upon settlement of outstanding unit appreciation rights, the related employer withholding taxes and the accelerated vesting of outstanding restricted Class B units. See
Note 13
to the consolidated financial statements included in Item 8 of this Form 10-K.
|
(4)
|
Represents fees paid to an executive recruiting firm, a non-recurring signing bonus and certain other benefits paid upon the hiring of our chief financial officer.
|
(5)
|
Represents consulting and advisory fees related to our operational and financial system upgrade initiative called Project Concrete.
|
(6)
|
Costs incurred in connection with the our planned relocation to a new home office, including duplicative non-cash deferred rent and legal costs.
|
(7)
|
For fiscal 2017, 2016 and 2015, amounts represent the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of
38.5%
,
39.7%
and
41.7%
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. For fiscal 2014, amount represents the tax effect of the aforementioned adjustments at an assumed effective tax rate of 13.4%, which includes provisions for certain LLC entity-level taxes and foreign withholding taxes.
|
(8)
|
Adjustment to give effect to (i) 5,750,000 shares issued to investors in our IPO and (ii) 339,306 shares issued upon settlement of outstanding unit appreciation rights, both of which were not retrospectively applied in the computations of earnings per share for fiscal 2014.
|
|
(in thousands)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net cash provided by operating activities
|
$
|
70,878
|
|
|
$
|
54,285
|
|
|
$
|
41,258
|
|
Net cash used in investing activities
|
(61,943
|
)
|
|
(114,761
|
)
|
|
(34,514
|
)
|
|||
Net cash provided by financing activities
|
965
|
|
|
1,234
|
|
|
61,428
|
|
|||
Increase (decrease) in cash and cash equivalents
|
9,900
|
|
|
(59,242
|
)
|
|
68,172
|
|
|||
Cash and cash equivalents at beginning of period
|
11,607
|
|
|
70,849
|
|
|
2,677
|
|
|||
Cash and cash equivalents at end of period
|
$
|
21,507
|
|
|
$
|
11,607
|
|
|
$
|
70,849
|
|
|
(in thousands)
|
Total
|
|
|
Less than
1 Year
|
|
|
1-3
Years
|
|
|
3-5
Years
|
|
|
More Than
5 Years
|
|
|||||
Operating lease obligations
(1)
|
$
|
271,811
|
|
|
$
|
24,123
|
|
|
$
|
51,862
|
|
|
$
|
52,582
|
|
|
$
|
143,244
|
|
Deemed landlord financing obligations
(1)
|
49,989
|
|
|
3,679
|
|
|
9,309
|
|
|
9,563
|
|
|
27,438
|
|
|||||
Liabilities under tax receivable agreement
(2)
|
159,373
|
|
|
937
|
|
|
17,008
|
|
|
17,714
|
|
|
123,714
|
|
|||||
Purchase obligations
|
167,063
|
|
|
82,561
|
|
|
11,468
|
|
|
13,504
|
|
|
59,530
|
|
|||||
Deferred compensation
(3)
|
2,450
|
|
|
2,450
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
TOTAL
|
$
|
650,686
|
|
|
$
|
113,750
|
|
|
$
|
89,647
|
|
|
$
|
93,363
|
|
|
$
|
353,926
|
|
(1)
|
See
Note 9 to the consolidated financial statements included in Item 8 for further discussion of our leases and deemed landlord financing.
|
(2)
|
See Notes 14 and 17 to the consolidated financial statements included in Item 8 for further discussion of our Tax Receivable Agreement and related liabilities.
|
(3)
|
See
Note 10 to the consolidated financial statements included in Item 8 for further discussion of our deferred compensation liability.
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
Randy Garutti
|
|
Tara Comonte
|
Chief Executive Officer and Director
|
|
Chief Financial Officer
|
(duly authorized and principal executive officer)
|
|
(duly authorized and principal financial officer)
|
|
|
|
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
||
ASSETS
|
|
|
|
||||||
Current assets:
|
|
|
|
||||||
|
Cash and cash equivalents
|
$
|
21,507
|
|
|
$
|
11,607
|
|
|
|
Marketable securities
|
63,036
|
|
|
62,040
|
|
|||
|
Accounts receivable
|
5,641
|
|
|
6,006
|
|
|||
|
Inventories
|
1,258
|
|
|
806
|
|
|||
|
Prepaid expenses and other current assets
|
1,757
|
|
|
3,485
|
|
|||
|
Total current assets
|
93,199
|
|
|
83,944
|
|
|||
Property and equipment, net
|
187,095
|
|
|
136,264
|
|
||||
Deferred income taxes, net
|
185,914
|
|
|
313,207
|
|
||||
Other assets
|
4,398
|
|
|
4,779
|
|
||||
TOTAL ASSETS
|
$
|
470,606
|
|
|
$
|
538,194
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||||
Current liabilities:
|
|
|
|
||||||
|
Accounts payable
|
$
|
8,210
|
|
|
$
|
6,921
|
|
|
|
Accrued expenses
|
11,649
|
|
|
8,538
|
|
|||
|
Accrued wages and related liabilities
|
6,228
|
|
|
6,084
|
|
|||
|
Other current liabilities
|
7,937
|
|
|
10,173
|
|
|||
|
Total current liabilities
|
34,024
|
|
|
31,716
|
|
|||
Deemed landlord financing
|
14,518
|
|
|
2,007
|
|
||||
Deferred rent
|
36,596
|
|
|
31,107
|
|
||||
Liabilities under tax receivable agreement, net of current portion
|
158,436
|
|
|
267,902
|
|
||||
Other long-term liabilities
|
2,553
|
|
|
4,109
|
|
||||
Total liabilities
|
246,127
|
|
|
336,841
|
|
||||
Commitments and contingencies
|
|
|
|
||||||
Stockholders' equity:
|
|
|
|
||||||
|
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
|
—
|
|
|
—
|
|
|||
|
Class A common stock, $0.001 par value—200,000,000 shares authorized; 26,527,477 and 25,151,384 shares issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
|
27
|
|
|
25
|
|
|||
|
Class B common stock, $0.001 par value—35,000,000 shares authorized; 10,250,007 and 11,253,592 shares issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
|
10
|
|
|
11
|
|
|||
|
Additional paid-in capital
|
153,105
|
|
|
135,448
|
|
|||
|
Retained earnings
|
16,399
|
|
|
16,719
|
|
|||
|
Accumulated other comprehensive loss
|
(49
|
)
|
|
(15
|
)
|
|||
|
Total stockholders' equity attributable to Shake Shack Inc.
|
169,492
|
|
|
152,188
|
|
|||
Non-controlling interests
|
54,987
|
|
|
49,165
|
|
||||
Total equity
|
224,479
|
|
|
201,353
|
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
470,606
|
|
|
$
|
538,194
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|
December 30
2015 |
|
|||
Shack sales
|
$
|
346,388
|
|
|
$
|
259,350
|
|
|
$
|
183,219
|
|
||
Licensing revenue
|
12,422
|
|
|
9,125
|
|
|
7,373
|
|
|||||
TOTAL REVENUE
|
358,810
|
|
|
268,475
|
|
|
190,592
|
|
|||||
Shack-level operating expenses:
|
|
|
|
|
|
||||||||
|
Food and paper costs
|
98,337
|
|
|
73,752
|
|
|
54,079
|
|
||||
|
Labor and related expenses
|
91,740
|
|
|
65,540
|
|
|
44,752
|
|
||||
|
Other operating expenses
|
35,805
|
|
|
24,946
|
|
|
16,307
|
|
||||
|
Occupancy and related expenses
|
28,197
|
|
|
21,820
|
|
|
15,207
|
|
||||
General and administrative expenses
|
39,003
|
|
|
30,556
|
|
|
37,825
|
|
|||||
Depreciation expense
|
21,704
|
|
|
14,502
|
|
|
10,222
|
|
|||||
Pre-opening costs
|
9,603
|
|
|
9,520
|
|
|
5,430
|
|
|||||
Loss on disposal of property and equipment
|
608
|
|
|
34
|
|
|
17
|
|
|||||
TOTAL EXPENSES
|
324,997
|
|
|
240,670
|
|
|
183,839
|
|
|||||
OPERATING INCOME
|
33,813
|
|
|
27,805
|
|
|
6,753
|
|
|||||
Other income, net
|
128,123
|
|
|
1,065
|
|
|
7
|
|
|||||
Interest expense
|
(1,643
|
)
|
|
(374
|
)
|
|
(332
|
)
|
|||||
INCOME BEFORE INCOME TAXES
|
160,293
|
|
|
28,496
|
|
|
6,428
|
|
|||||
Income tax expense
|
151,409
|
|
|
6,350
|
|
|
3,304
|
|
|||||
NET INCOME
|
8,884
|
|
|
22,146
|
|
|
3,124
|
|
|||||
Less: net income attributable to non-controlling interests
|
9,204
|
|
|
9,700
|
|
|
11,900
|
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|
$
|
(8,776
|
)
|
||
Earnings (loss) per share of Class A common stock:
|
|
|
|
|
|
||||||||
|
Basic
|
$
|
(0.01
|
)
|
|
$
|
0.54
|
|
|
$
|
(0.65
|
)
|
|
|
Diluted
|
$
|
(0.01
|
)
|
|
$
|
0.53
|
|
|
$
|
(0.65
|
)
|
|
Weighted-average shares of Class A common stock outstanding:
|
|
|
|
|
|
||||||||
|
Basic
|
25,876
|
|
|
22,956
|
|
|
13,588
|
|
||||
|
Diluted
|
25,876
|
|
|
23,449
|
|
|
13,588
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|
December 30
2015 |
|
|||
Net income
|
$
|
8,884
|
|
|
$
|
22,146
|
|
|
$
|
3,124
|
|
||
Other comprehensive (loss), net of tax:
|
|
|
|
|
|
||||||||
|
Available-for-sale securities
(1)
:
|
|
|
|
|
|
|||||||
|
|
Change in net unrealized holding (losses)
|
(94
|
)
|
|
(35
|
)
|
|
(11
|
)
|
|||
|
|
Less: reclassification adjustments for net realized losses included in net income
|
47
|
|
|
19
|
|
|
—
|
|
|||
|
|
Net change
|
(47
|
)
|
|
(16
|
)
|
|
(11
|
)
|
|||
OTHER COMPREHENSIVE LOSS
|
(47
|
)
|
|
(16
|
)
|
|
(11
|
)
|
|||||
COMPREHENSIVE INCOME
|
8,837
|
|
|
22,130
|
|
|
3,113
|
|
|||||
Less: comprehensive income attributable to non-controlling interests
|
9,191
|
|
|
9,694
|
|
|
11,894
|
|
|||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
|
$
|
(354
|
)
|
|
$
|
12,436
|
|
|
$
|
(8,781
|
)
|
|
|
Members'
Equity
|
|
|
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 31, 2014
|
12,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,600
|
|
Net loss prior to the Organizational Transactions
|
(13,049
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,049
|
)
|
||||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net unrealized losses related to available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
(6
|
)
|
|
(11
|
)
|
|||||||
Member distributions
|
(11,125
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,125
|
)
|
Equity-based compensation recognized prior to the Organizational Transactions
|
7,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,731
|
|
Issuance of Class A common stock sold in initial public offering, net of underwriting discounts, commissions and offering costs
|
|
|
|
5,750,000
|
|
|
6
|
|
|
|
|
|
|
|
|
109,256
|
|
|
|
|
|
|
|
|
|
|
|
109,262
|
|
Issuance of Class A common stock in settlement of unit appreciation rights
|
|
|
|
339,306
|
|
|
—
|
|
|
|
|
|
|
|
|
987
|
|
|
|
|
|
|
|
|
(987
|
)
|
|
—
|
|
Effect of the Organizational Transactions
|
3,843
|
|
|
5,968,841
|
|
|
6
|
|
|
24,191,853
|
|
|
24
|
|
|
(75,182
|
)
|
|
|
|
|
|
|
|
71,339
|
|
|
30
|
|
Net income subsequent to the Organizational Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,273
|
|
|
|
|
|
11,900
|
|
|
16,173
|
|
Equity-based compensation recognized subsequent to the Organizational Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,314
|
|
|
|
|
|
|
|
|
|
|
|
4,314
|
|
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,094
|
|
|
|
|
|
|
|
|
|
|
|
31,094
|
|
Redemption of LLC Interests
|
|
|
|
6,003,308
|
|
|
6
|
|
|
(6,003,308
|
)
|
|
(6
|
)
|
|
19,934
|
|
|
|
|
|
|
|
|
(19,934
|
)
|
|
—
|
|
Effect of USC Merger
|
|
|
|
1,727,804
|
|
|
2
|
|
|
(1,727,804
|
)
|
|
(2
|
)
|
|
5,908
|
|
|
|
|
|
|
(5,908
|
)
|
|
—
|
|
||
BALANCE, DECEMBER 30, 2015
|
—
|
|
|
19,789,259
|
|
|
20
|
|
|
16,460,741
|
|
|
16
|
|
|
96,311
|
|
|
4,273
|
|
|
(5
|
)
|
|
56,404
|
|
|
157,019
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
12,446
|
|
|
|
|
9,700
|
|
|
22,146
|
|
|||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net unrealized losses related to available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
(6
|
)
|
|
(16
|
)
|
|||||||
Equity-based compensation
|
|
|
|
|
|
|
|
|
|
|
5,493
|
|
|
|
|
|
|
|
|
5,493
|
|
||||||||
Stock option exercises
|
|
|
154,976
|
|
|
—
|
|
|
|
|
|
|
795
|
|
|
|
|
|
|
2,402
|
|
|
3,197
|
|
|||||
Income tax effect of stock compensation plans
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
|
|
|
|
3
|
|
|
33
|
|
|||||||
Redemption of LLC Interests
|
|
|
5,207,149
|
|
|
5
|
|
|
(5,207,149
|
)
|
|
(5
|
)
|
|
16,986
|
|
|
|
|
|
|
(16,986
|
)
|
|
—
|
|
|||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
|
|
|
|
|
|
|
|
|
|
|
15,833
|
|
|
|
|
|
|
|
|
15,833
|
|
||||||||
Distributions paid and payable to non-controlling interest holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,352
|
)
|
|
(2,352
|
)
|
||||||||
BALANCE, DECEMBER 28, 2016
|
—
|
|
|
25,151,384
|
|
|
25
|
|
|
11,253,592
|
|
|
11
|
|
|
135,448
|
|
|
16,719
|
|
|
(15
|
)
|
|
49,165
|
|
|
201,353
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(320
|
)
|
|
|
|
9,204
|
|
|
8,884
|
|
|||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net unrealized losses related to available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(34
|
)
|
|
(13
|
)
|
|
(47
|
)
|
|||||||
Equity-based compensation
|
|
|
|
|
|
|
|
|
|
|
5,732
|
|
|
|
|
|
|
|
|
5,732
|
|
||||||||
Activity under stock compensation plans
|
|
|
372,508
|
|
|
1
|
|
|
|
|
|
|
4,451
|
|
|
|
|
|
|
2,818
|
|
|
7,270
|
|
|||||
Redemption of LLC Interests
|
|
|
1,003,585
|
|
|
1
|
|
|
(1,003,585
|
)
|
|
(1
|
)
|
|
4,415
|
|
|
|
|
|
|
(4,415
|
)
|
|
—
|
|
|||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
|
|
|
|
|
|
|
|
|
|
|
3,059
|
|
|
|
|
|
|
|
|
3,059
|
|
||||||||
Distributions paid to non-controlling interest holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,772
|
)
|
|
(1,772
|
)
|
||||||||
BALANCE, DECEMBER 27, 2017
|
—
|
|
|
26,527,477
|
|
|
27
|
|
|
10,250,007
|
|
|
10
|
|
|
153,105
|
|
|
16,399
|
|
|
(49
|
)
|
|
54,987
|
|
|
224,479
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|
December 30
2015 |
|
|||
OPERATING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Net income (loss) (including amounts attributable to non-controlling interests)
|
$
|
8,884
|
|
|
$
|
22,146
|
|
|
$
|
3,124
|
|
|||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||||||||||
|
Depreciation expense
|
21,704
|
|
|
14,502
|
|
|
10,222
|
|
|||||||
|
Equity-based compensation
|
5,623
|
|
|
5,354
|
|
|
16,681
|
|
|||||||
|
Deferred income taxes
|
146,334
|
|
|
(523
|
)
|
|
(734
|
)
|
|||||||
|
Non-cash interest expense
|
317
|
|
|
304
|
|
|
273
|
|
|||||||
|
Excess tax benefits on equity-based compensation
|
—
|
|
|
(33
|
)
|
|
—
|
|
|||||||
|
Loss on sale of marketable securities
|
5
|
|
|
18
|
|
|
—
|
|
|||||||
|
Loss on disposal of property and equipment
|
608
|
|
|
34
|
|
|
17
|
|
|||||||
|
Other non-cash income
|
(127,221
|
)
|
|
(688
|
)
|
|
—
|
|
|||||||
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||||||
|
|
Accounts receivable
|
6,421
|
|
|
2,974
|
|
|
775
|
|
||||||
|
|
Inventories
|
(452
|
)
|
|
(263
|
)
|
|
(14
|
)
|
||||||
|
|
Prepaid expenses and other current assets
|
2,244
|
|
|
(756
|
)
|
|
(958
|
)
|
||||||
|
|
Other assets
|
(446
|
)
|
|
(822
|
)
|
|
1,293
|
|
||||||
|
|
Accounts payable
|
1,235
|
|
|
839
|
|
|
201
|
|
||||||
|
|
Accrued expenses
|
4,388
|
|
|
5,560
|
|
|
2,548
|
|
||||||
|
|
Accrued wages and related liabilities
|
144
|
|
|
280
|
|
|
3,394
|
|
||||||
|
|
Other current liabilities
|
(988
|
)
|
|
2,130
|
|
|
257
|
|
||||||
|
|
Deferred rent
|
1,008
|
|
|
3,415
|
|
|
4,363
|
|
||||||
|
|
Other long-term liabilities
|
1,070
|
|
|
(186
|
)
|
|
(184
|
)
|
||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
70,878
|
|
|
54,285
|
|
|
41,258
|
|
||||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
(61,533
|
)
|
|
(54,433
|
)
|
|
(32,117
|
)
|
||||||||
Purchases of marketable securities
|
(7,861
|
)
|
|
(61,266
|
)
|
|
(2,397
|
)
|
||||||||
Sales of marketable securities
|
7,451
|
|
|
938
|
|
|
—
|
|
||||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(61,943
|
)
|
|
(114,761
|
)
|
|
(34,514
|
)
|
||||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Payments on promissory note
|
—
|
|
|
(313
|
)
|
|
—
|
|
||||||||
Proceeds from Revolving Credit Facility
|
—
|
|
|
—
|
|
|
4,000
|
|
||||||||
Payments on Revolving Credit Facility
|
—
|
|
|
—
|
|
|
(36,000
|
)
|
||||||||
Proceeds from deemed landlord financing
|
1,183
|
|
|
65
|
|
|
—
|
|
||||||||
Payments on deemed landlord financing
|
(266
|
)
|
|
—
|
|
|
—
|
|
||||||||
Deferred financing costs
|
—
|
|
|
—
|
|
|
(103
|
)
|
||||||||
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts, commissions and offering costs
|
—
|
|
|
—
|
|
|
109,262
|
|
||||||||
Proceeds from issuance of Class B common stock
|
—
|
|
|
—
|
|
|
30
|
|
||||||||
Distributions paid to non-controlling interest holders
|
(2,379
|
)
|
|
(1,745
|
)
|
|
—
|
|
||||||||
Distributions paid to members prior to the initial public offering
|
—
|
|
|
—
|
|
|
(11,125
|
)
|
||||||||
Payments under tax receivable agreement
|
(4,844
|
)
|
|
—
|
|
|
—
|
|
||||||||
Proceeds from stock option exercises
|
7,585
|
|
|
3,194
|
|
|
—
|
|
||||||||
Employee withholding taxes related to net settled equity awards
|
(314
|
)
|
|
—
|
|
|
(4,636
|
)
|
||||||||
Excess tax benefits from equity-based compensation
|
—
|
|
|
33
|
|
|
—
|
|
||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
965
|
|
|
1,234
|
|
|
61,428
|
|
||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
9,900
|
|
|
(59,242
|
)
|
|
68,172
|
|
||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
11,607
|
|
|
70,849
|
|
|
2,677
|
|
||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
21,507
|
|
|
$
|
11,607
|
|
|
$
|
70,849
|
|
|
|
|
Page
|
|
▪
|
We amended and restated the limited liability company agreement of SSE Holdings (as amended, the "SSE Holdings LLC Agreement") to, among other things, (i) provide for a new single class of common membership interests in SSE Holdings ("LLC Interests"), (ii) exchange all of the membership interests of the then-existing holders of SSE Holdings for LLC Interests and (iii) appoint Shake Shack Inc. as the sole managing member of SSE Holdings. See
Note 11
.
|
▪
|
We amended and restated our certificate of incorporation to, among other things, (i) provide for Class B common stock with voting rights but no economic interests (where "economic interests" means the right to receive any distributions or dividends, whether cash or stock, in connection with common stock) and (ii) issue shares of Class B common stock to the then-existing holders of SSE Holdings on a
one
-to-one basis with the number of LLC Interests they own. See
Note 11
.
|
▪
|
We acquired, by merger,
two
entities that were owned by former indirect members of SSE Holdings, for which we issued
5,968,841
shares of Class A common stock as merger consideration (the "Mergers"). The only assets held by the
two
merged entities prior to the merger were
5,968,841
LLC Interests and a corresponding number of shares of Class B common stock. Upon consummation of the Mergers, we canceled the
5,968,841
shares of Class B common stock and recognized the
5,968,841
of LLC Interests at carrying value, as the Mergers are considered to be transactions between entities under common control.
|
|
▪
|
Level 1 - Quoted prices in active markets for identical assets or liabilities
|
▪
|
Level 2 - Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
|
▪
|
Level 3 - Inputs that are both unobservable and significant to the overall fair value measurements reflecting an entity's estimates of assumptions that market participants would use in pricing the asset or liability
|
Accounting Standards Update (“ASU”)
|
Description
|
Expected Impact
|
Effective Date
|
Statement of Cash Flows: Classification of Certain Cash Receipts and Payments
(ASU 2016-15)
|
This standard provides guidance on eight specific cash flow issues with the objective of reducing diversity in practice. It should be applied retrospectively to each period presented, subject to certain conditions.
|
We do not expect this standard to have a material impact on our consolidated financial statements.
|
December 28, 2017
|
Recognition and Measurement of Financial Assets and Financial Liabilities
(ASU 2016-01)
|
For public business entities, this standard requires: (i) certain equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) a qualitative assessment to identify impairment of equity investments without readily determinable fair values; (iii) elimination of the requirement to disclose the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet; (iv) use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) separate presentation of financial assets and liabilities by measurement category and form of financial asset in the financial statements; and (vii) an entity to evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The standard should be applied by means of a cumulative-effect adjustment to the balance sheet at the beginning of the fiscal year of adoption. Early adoption is permitted, subject to certain conditions resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value.
|
We do not expect this standard to have a material impact on our consolidated financial statements.
|
December 28, 2017
|
Leases
(ASU 2016-02, 2018-01)
|
This standard establishes a new lease accounting model, which introduces the recognition of lease assets and liabilities for those leases classified as operating leases under previous GAAP. It should be applied using a modified retrospective approach, with the option to elect various practical expedients. Early adoption is permitted.
|
We are currently evaluating the impact this standard will have on our consolidated financial statements. We have developed an implementation project plan, and are in process of identifying the complete population of leases to be analyzed under the new standard. We plan to adopt the standard on December 27, 2018.
|
December 27, 2018
|
Accounting Standards Update (“ASU”)
|
Description
|
Expected Impact
|
Effective Date
|
Revenue from Contracts with Customers and related standards (ASU’s 2014-09, 2015-14, 2016-08, 2016-10, 2016-12, 2016-20)
|
This standard supersedes the existing revenue recognition guidance and provides a new framework for recognizing revenue. The core principle of the standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new standard also requires significantly more comprehensive disclosures than the existing standard. Guidance subsequent to ASU 2014-09 has been issued to clarify various provisions in the standard, including principal versus agent considerations, identifying performance obligations, licensing transactions, as well as various technical corrections and improvements. This standard may be adopted using either a retrospective or modified retrospective method. Early adoption is permitted.
|
We are substantially complete with our evaluation of the impact this standard is expected to have on our consolidated financial statements.
Licensing revenue
Revenue recognition related to sales-based royalties, which represents a significant portion of the licensing revenue balance, will not change from current policy. However, the pattern and timing of revenue recognition related to the fixed fees associated with our licensing agreements (such as restaurant opening and initial territory fees) will differ from current policy.
Currently, restaurant opening fees are recorded as deferred revenue when received and proportionate amounts are recognized as revenue when a licensed Shack is opened and all material services and conditions related to the fee have been substantially performed. Territory fees are recorded as deferred revenue when received and recognized as revenue on a straight-line basis over the term of the license agreement, which generally begins upon execution of the contract.
Under the new standard, the license granted to each restaurant under each existing contract is considered a performance obligation. All other promises (such as providing assistance during the opening of a restaurant) will be combined with the license as one performance obligation. Accordingly, we will allocate the total transaction price (comprised of the restaurant opening and territory fees) to each restaurant expected to be opened by the licensee under the contract. We will recognize the fee allocated to each restaurant as revenue on a straight-line basis over the restaurant’s license term, which generally begins when the restaurant opens.
Shack sales
We do not currently expect a significant impact to Shack sales as a result of the new revenue standard.
Adoption and transition adjustment
We plan to adopt the standard on December 28, 2017, utilizing a modified retrospective transition approach. The adoption will result in a decrease to retained earnings of approximately $1,574 on the transition date, with a corresponding increase of $1,769 in other long-term liabilities, a decrease of $68 in other current liabilities, an increase of $100 to accounts receivable, with the remaining impact representing the tax impact of the transition adjustment, as an increase to deferred tax assets.
|
December 28, 2017
|
|
|
|
December 27, 2017
|
|
|||||||||||||||||||||
|
Cost Basis
|
|
|
Gross Unrealized Gains
|
|
|
Gross Unrealized Losses
|
|
|
Fair Value
|
|
|
Cash and Cash Equivalents
|
|
|
Marketable Securities
|
|
|||||||
Cash
|
$
|
16,138
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,138
|
|
|
$
|
16,138
|
|
|
$
|
—
|
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Money market funds
|
5,369
|
|
|
—
|
|
|
—
|
|
|
5,369
|
|
|
5,369
|
|
|
—
|
|
||||||
|
Mutual funds
|
60,985
|
|
|
61
|
|
|
(122
|
)
|
|
60,924
|
|
|
—
|
|
|
60,924
|
|
||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Corporate debt securities
(1)
|
2,125
|
|
|
2
|
|
|
(15
|
)
|
|
2,112
|
|
|
—
|
|
|
2,112
|
|
||||||
Total
|
$
|
84,617
|
|
|
$
|
63
|
|
|
$
|
(137
|
)
|
|
$
|
84,543
|
|
|
$
|
21,507
|
|
|
$
|
63,036
|
|
|
|
December 28, 2016
|
|
|||||||||||||||||||||
|
Cost Basis
|
|
|
Gross Unrealized Gains
|
|
|
Gross Unrealized Losses
|
|
|
Fair Value
|
|
|
Cash and Cash Equivalents
|
|
|
Marketable Securities
|
|
|||||||
Cash
|
$
|
6,322
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,322
|
|
|
$
|
6,322
|
|
|
$
|
—
|
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Money market funds
|
5,285
|
|
|
—
|
|
|
—
|
|
|
5,285
|
|
|
5,285
|
|
|
—
|
|
||||||
|
Mutual funds
|
60,232
|
|
|
—
|
|
|
—
|
|
|
60,232
|
|
|
—
|
|
|
60,232
|
|
||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Corporate debt securities
(1)
|
2,473
|
|
|
3
|
|
|
(30
|
)
|
|
2,446
|
|
|
—
|
|
|
2,446
|
|
||||||
Total
|
$
|
74,312
|
|
|
$
|
3
|
|
|
$
|
(30
|
)
|
|
$
|
74,285
|
|
|
$
|
11,607
|
|
|
$
|
62,678
|
|
(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.
|
|
|
December 27, 2017
|
|
|||||||||||||||||||||
|
|
Less than 12 Months
|
|
|
12 Months or Greater
|
|
|
Total
|
|
|||||||||||||||
|
Fair Value
|
|
|
Unrealized Loss
|
|
|
Fair Value
|
|
|
Unrealized Loss
|
|
|
Fair Value
|
|
|
Unrealized Loss
|
|
|||||||
|
Money market funds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Mutual funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Corporate debt securities
|
1,675
|
|
|
(12
|
)
|
|
162
|
|
|
(3
|
)
|
|
1,837
|
|
|
(15
|
)
|
||||||
Total
|
$
|
1,675
|
|
|
$
|
(12
|
)
|
|
$
|
162
|
|
|
$
|
(3
|
)
|
|
$
|
1,837
|
|
|
$
|
(15
|
)
|
|
|
December 28, 2016
|
|
|||||||||||||||||||||
|
|
Less than 12 Months
|
|
|
12 Months or Greater
|
|
|
Total
|
|
|||||||||||||||
|
Fair Value
|
|
|
Unrealized Loss
|
|
|
Fair Value
|
|
|
Unrealized Loss
|
|
|
Fair Value
|
|
|
Unrealized Loss
|
|
|||||||
|
Money market funds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Mutual funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Corporate debt securities
|
1,244
|
|
|
(10
|
)
|
|
540
|
|
|
(20
|
)
|
|
1,784
|
|
|
(30
|
)
|
||||||
Total
|
$
|
1,244
|
|
|
$
|
(10
|
)
|
|
$
|
540
|
|
|
$
|
(20
|
)
|
|
$
|
1,784
|
|
|
$
|
(30
|
)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|||||||
|
Dividend income
|
$
|
830
|
|
|
$
|
296
|
|
|
$
|
—
|
|
|
Interest income
|
77
|
|
|
88
|
|
|
7
|
|
|||
|
Loss on investments
|
(5
|
)
|
|
(7
|
)
|
|
—
|
|
|||
Total other income, net
|
$
|
902
|
|
|
$
|
377
|
|
|
$
|
7
|
|
|
2017
|
|
2016
|
|
|||
Available-for-sale securities:
|
|
|
|||||
|
Gross proceeds from sales and redemptions
|
$
|
2,223
|
|
$
|
938
|
|
|
Cost basis of sales and redemptions
|
2,271
|
|
956
|
|
||
|
Gross realized gains included in net income
|
1
|
|
2
|
|
||
|
Gross realized losses included in net income
|
(49
|
)
|
(20
|
)
|
||
|
Amounts reclassified out of accumulated other comprehensive loss
|
47
|
|
19
|
|
|
December 27
2017 |
|
|
Due within one year
|
$
|
2,112
|
|
Due after one year through 5 years
|
—
|
|
|
Due after 5 years through 10 years
|
—
|
|
|
Due after 10 years
|
—
|
|
|
Total
|
$
|
2,112
|
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
||
Landlord receivables
|
$
|
1,660
|
|
|
$
|
2,606
|
|
Licensing receivables
|
1,422
|
|
|
1,278
|
|
||
Credit card receivables
|
2,018
|
|
|
1,589
|
|
||
Other receivables
|
541
|
|
|
533
|
|
||
Accounts receivable
|
$
|
5,641
|
|
|
$
|
6,006
|
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
||
Food
|
$
|
874
|
|
|
$
|
543
|
|
Wine
|
69
|
|
|
47
|
|
||
Beer
|
85
|
|
|
58
|
|
||
Beverages
|
111
|
|
|
79
|
|
||
Retail merchandise
|
119
|
|
|
79
|
|
||
Inventories
|
$
|
1,258
|
|
|
$
|
806
|
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
||
Leasehold improvements
|
$
|
166,963
|
|
|
$
|
120,629
|
|
Landlord funded assets
|
7,472
|
|
|
—
|
|
||
Equipment
|
31,608
|
|
|
23,194
|
|
||
Furniture and fixtures
|
10,128
|
|
|
7,342
|
|
||
Computer equipment and software
|
12,721
|
|
|
8,710
|
|
||
Construction in progress (includes assets under construction from deemed landlord financing)
|
16,458
|
|
|
13,510
|
|
||
Property and equipment, gross
|
245,350
|
|
|
173,385
|
|
||
Less: accumulated depreciation
|
(58,255
|
)
|
|
(37,121
|
)
|
||
Property and equipment, net
|
$
|
187,095
|
|
|
$
|
136,264
|
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
||
Sales tax payable
|
$
|
1,813
|
|
|
$
|
1,324
|
|
Current portion of liabilities under tax receivable agreement
|
937
|
|
|
4,580
|
|
||
Gift card liability
|
1,472
|
|
|
1,153
|
|
||
Other
|
3,715
|
|
|
3,116
|
|
||
Other current liabilities
|
$
|
7,937
|
|
|
$
|
10,173
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Minimum rent
|
$
|
20,421
|
|
|
$
|
15,408
|
|
|
$
|
10,796
|
|
|
Deferred rent
|
838
|
|
|
2,122
|
|
|
1,482
|
|
||||
Contingent rent
|
4,902
|
|
|
4,294
|
|
|
2,959
|
|
||||
Total rent expense
|
$
|
26,161
|
|
|
$
|
21,824
|
|
|
$
|
15,237
|
|
|
Operating
Leases
|
|
|
Deemed Landlord Financing
(1)
|
|
||
2018
|
$
|
24,123
|
|
|
$
|
3,679
|
|
2019
|
26,045
|
|
|
4,614
|
|
||
2020
|
25,817
|
|
|
4,695
|
|
||
2021
|
26,076
|
|
|
4,747
|
|
||
2022
|
26,506
|
|
|
4,816
|
|
||
Thereafter
|
143,244
|
|
|
27,438
|
|
||
Total minimum lease payments
|
$
|
271,811
|
|
|
$
|
49,989
|
|
(1)
|
Amounts include minimum lease payments for
11
leases under construction as of
December 27, 2017
where we are deemed the accounting owner. Final classification of lease payments under deemed landlord financing is subject to change pending sale lease-back analysis performed at the store opening date.
|
|
|
|
|
2017
|
|
|
2016
|
|
||||||
|
LLC Interests
|
|
|
Ownership %
|
|
|
LLC Interests
|
|
|
Ownership %
|
|
Number of LLC Interests held by Shake Shack Inc.
|
26,527,477
|
|
|
72.1
|
%
|
|
25,151,384
|
|
|
69.1
|
%
|
Number of LLC Interests held by non-controlling interest holders
|
10,250,007
|
|
|
27.9
|
%
|
|
11,253,592
|
|
|
30.9
|
%
|
Total LLC Interests outstanding
|
36,777,484
|
|
|
100.0
|
%
|
|
36,404,976
|
|
|
100.0
|
%
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||
Net income (loss) attributable to Shake Shack Inc.
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|
$
|
(8,776
|
)
|
|
Other comprehensive loss:
|
|
|
|
|
|
|||||||
|
Unrealized holding losses on available-for-sale securities
|
(34
|
)
|
|
(10
|
)
|
|
(5
|
)
|
|||
Transfers (to) from non-controlling interests:
|
|
|
|
|
|
|||||||
|
Increase in additional paid-in capital as a result of settlement of unit appreciation rights
|
—
|
|
|
—
|
|
|
987
|
|
|||
|
Decrease in additional paid-in capital 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
|
4,415
|
|
|
16,986
|
|
|
19,934
|
|
|||
|
Increase in additional paid-in capital as a result of the USC Merger
|
—
|
|
|
—
|
|
|
5,908
|
|
|||
|
Increase in additional paid-in capital as a result of stock option exercises and the related income tax effect
|
4,451
|
|
|
825
|
|
|
—
|
|
|||
Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.
|
$
|
8,512
|
|
|
$
|
30,247
|
|
|
$
|
(57,134
|
)
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Unit appreciation rights
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,762
|
|
|
Restricted Class B units
|
—
|
|
|
—
|
|
|
605
|
|
||||
Stock options
|
3,474
|
|
|
4,262
|
|
|
4,314
|
|
||||
Performance stock units
|
1,869
|
|
|
1,092
|
|
|
—
|
|
||||
Restricted stock units
|
280
|
|
|
—
|
|
|
—
|
|
||||
Equity-based compensation expense
|
$
|
5,623
|
|
|
$
|
5,354
|
|
|
$
|
16,681
|
|
|
|
|
|
|
|
|
|||||||
Total income tax benefit recognized related to equity-based compensation
|
$
|
198
|
|
|
$
|
168
|
|
|
$
|
482
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Expected term (years)
(1)
|
7.5
|
|
|
5.5
|
|
|
7.5
|
|
Expected volatility
(2)
|
44.5
|
%
|
|
50.7
|
%
|
|
35.1
|
%
|
Risk-free interest rate
(3)
|
2.1
|
%
|
|
1.5
|
%
|
|
1.6
|
%
|
Dividend yield
(4)
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
(1)
|
Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
|
(2)
|
Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
|
(3)
|
The risk-free rate rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
|
(4)
|
We have assumed a dividend yield of
zero
as we have no plans to declare dividends in the foreseeable future.
|
|
|
Stock
Options
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Aggregate Intrinsic Value
|
|
|
Weighted Average Remaining Contractual Life (Years)
|
||
Outstanding as of December 31, 2014
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|||
|
Granted
|
2,622,281
|
|
|
21.00
|
|
|
|
|
|
|||
|
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|||
|
Forfeited
|
(47,300
|
)
|
|
(21.00
|
)
|
|
|
|
|
|||
|
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding as of December 30, 2015
|
2,574,981
|
|
|
$
|
21.00
|
|
|
|
|
|
|||
|
Granted
|
16,931
|
|
|
34.74
|
|
|
|
|
|
|||
|
Exercised
|
(160,230
|
)
|
|
21.00
|
|
|
|
|
|
|||
|
Forfeited
|
(66,960
|
)
|
|
(21.00
|
)
|
|
|
|
|
|||
|
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding as of December 28, 2016
|
2,364,722
|
|
|
$
|
21.10
|
|
|
|
|
|
|||
|
Granted
|
5,150
|
|
|
38.91
|
|
|
|
|
|
|||
|
Exercised
|
(359,011
|
)
|
|
21.13
|
|
|
|
|
|
|||
|
Forfeited
|
(291,520
|
)
|
|
(21.00
|
)
|
|
|
|
|
|||
|
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding as of December 27, 2017
|
1,719,341
|
|
|
$
|
21.16
|
|
|
$
|
39,851
|
|
|
7.1
|
|
Options vested and exercisable as of December 27, 2017
|
543,246
|
|
|
$
|
21.34
|
|
|
$
|
12,493
|
|
|
7.1
|
|
Options expected to vest as of December 27, 2017
|
1,098,577
|
|
|
$
|
21.08
|
|
|
$
|
25,549
|
|
|
7.1
|
|
|
Stock
Options
|
|
|
Weighted
Average
Grant-Date Fair Value
|
|
|
Unvested as of December 31, 2014
|
—
|
|
|
$
|
—
|
|
|
|
Vested
|
—
|
|
|
—
|
|
|
|
Granted
|
2,622,281
|
|
|
8.53
|
|
|
|
Forfeited
|
(47,300
|
)
|
|
8.59
|
|
|
Unvested as of December 30, 2015
|
2,574,981
|
|
|
$
|
8.53
|
|
|
|
Vested
|
(562,296
|
)
|
|
8.32
|
|
|
|
Granted
|
16,931
|
|
|
16.32
|
|
|
|
Forfeited
|
(65,365
|
)
|
|
8.59
|
|
|
Unvested as of December 28, 2016
|
1,964,251
|
|
|
$
|
8.66
|
|
|
|
Vested
|
(503,686
|
)
|
|
8.85
|
|
|
|
Granted
|
5,150
|
|
|
19.42
|
|
|
|
Forfeited
|
(289,620
|
)
|
|
8.59
|
|
|
Unvested as of December 27, 2017
|
1,176,095
|
|
|
$
|
8.64
|
|
|
|
Options Outstanding
|
|
|
Options Exercisable
|
|
|||||||||||||
|
|
Number Outstanding at December 27, 2017
|
|
|
Weighted Average Remaining Contractual Life (Years)
|
|
Weighted Average Exercise Price
|
|
|
Number Exercisable at December 27, 2017
|
|
|
Weighted Average Remaining Contractual Life (Years)
|
|
|
Weighted Average Exercise Price
|
|
||
Exercise Price
|
|
|
|
|
|
|
|||||||||||||
$21.00
|
|
1,700,665
|
|
|
7.1
|
|
$
|
21.00
|
|
|
529,720
|
|
|
7.1
|
|
|
$
|
21.00
|
|
$34.62
|
|
12,418
|
|
|
8.4
|
|
$
|
34.62
|
|
|
12,418
|
|
|
8.4
|
|
|
$
|
34.62
|
|
$36.41
|
|
1,108
|
|
|
8.9
|
|
$
|
36.41
|
|
|
1,108
|
|
|
8.9
|
|
|
$
|
36.41
|
|
$38.91
|
|
5,150
|
|
|
9.5
|
|
$
|
38.91
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
Performance
Stock
Units
|
|
|
Weighted
Average
Grant Date Fair Value
|
|
|
Outstanding as of December 30, 2015
|
—
|
|
|
$
|
—
|
|
|
|
Granted
|
63,600
|
|
|
38.41
|
|
|
|
Performance achievement
(1)
|
—
|
|
|
—
|
|
|
|
Vested
|
—
|
|
|
—
|
|
|
|
Forfeited
|
(2,000
|
)
|
|
38.43
|
|
|
|
Expired
|
—
|
|
|
—
|
|
|
Outstanding as of December 28, 2016
|
61,600
|
|
|
$
|
38.41
|
|
|
|
Granted
|
87,596
|
|
|
37.90
|
|
|
|
Performance achievement
(1)
|
9,545
|
|
|
38.40
|
|
|
|
Vested
|
(22,703
|
)
|
|
38.40
|
|
|
|
Forfeited
|
(11,196
|
)
|
|
38.28
|
|
|
|
Expired
|
—
|
|
|
—
|
|
|
Outstanding as of December 27, 2017
|
124,842
|
|
|
$
|
38.06
|
|
(1)
|
Represents incremental awards earned based on the achievement of performance conditions.
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Domestic
|
$
|
152,204
|
|
|
$
|
20,623
|
|
|
$
|
244
|
|
Foreign
|
8,089
|
|
|
7,873
|
|
|
6,184
|
|
|||
Income before income taxes
|
$
|
160,293
|
|
|
$
|
28,496
|
|
|
$
|
6,428
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Current income taxes:
|
|
|
|
|
|
||||||||
|
Federal
|
$
|
518
|
|
|
$
|
3,767
|
|
|
$
|
2,474
|
|
|
|
State and local
|
3,615
|
|
|
2,439
|
|
|
1,131
|
|
||||
|
Foreign
|
942
|
|
|
667
|
|
|
433
|
|
||||
|
Total current income taxes
|
5,075
|
|
|
6,873
|
|
|
4,038
|
|
||||
Deferred income taxes:
|
|
|
|
|
|
||||||||
|
Federal
|
145,139
|
|
|
(48
|
)
|
|
(267
|
)
|
||||
|
State and local
|
1,195
|
|
|
(475
|
)
|
|
(467
|
)
|
||||
|
Total deferred income taxes
|
146,334
|
|
|
(523
|
)
|
|
(734
|
)
|
||||
Income tax expense
|
$
|
151,409
|
|
|
$
|
6,350
|
|
|
$
|
3,304
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||||||||
Expected U.S. federal income taxes at statutory rate
|
$
|
56,103
|
|
35.0
|
%
|
|
$
|
9,689
|
|
34.0
|
%
|
|
$
|
2,186
|
|
34.0
|
%
|
|
State and local income taxes, net of federal benefit
|
2,590
|
|
1.6
|
%
|
|
1,461
|
|
5.1
|
%
|
|
663
|
|
10.3
|
%
|
||||
Foreign withholding taxes
|
942
|
|
0.6
|
%
|
|
667
|
|
2.3
|
%
|
|
433
|
|
6.7
|
%
|
||||
Non-deductible expenses
|
223
|
|
0.1
|
%
|
|
25
|
|
0.1
|
%
|
|
653
|
|
10.2
|
%
|
||||
Tax credits
|
(1,230
|
)
|
(0.8
|
)%
|
|
(779
|
)
|
(2.7
|
)%
|
|
(141
|
)
|
(2.2
|
)%
|
||||
Non-controlling interest
|
(3,273
|
)
|
(2.0
|
)%
|
|
(3,765
|
)
|
(13.2
|
)%
|
|
(490
|
)
|
(7.6
|
)%
|
||||
Remeasurement of deferred tax assets in connection with the enactment of the TCJA
|
138,636
|
|
86.5
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
||||
Remeasurement of deferred tax assets in connection with other tax rate changes
|
1,657
|
|
1.0
|
%
|
|
(1,353
|
)
|
(4.7
|
)%
|
|
—
|
|
—
|
%
|
||||
Remeasurement of liabilities under tax receivable agreement in connection with the enactment of the TCJA
|
(44,051
|
)
|
(27.4
|
)%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
||||
Other
|
(188
|
)
|
(0.1
|
)%
|
|
405
|
|
1.4
|
%
|
|
—
|
|
—
|
%
|
||||
Income tax expense
|
$
|
151,409
|
|
94.5
|
%
|
|
$
|
6,350
|
|
22.3
|
%
|
|
$
|
3,304
|
|
51.4
|
%
|
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
||
Deferred tax assets:
|
|
|
|
||||||
|
Investment in partnership
|
$
|
137,449
|
|
|
$
|
209,648
|
|
|
|
Tax Receivable Agreement
|
43,464
|
|
|
110,022
|
|
|||
|
Deferred rent
|
571
|
|
|
561
|
|
|||
|
Deferred revenue
|
59
|
|
|
53
|
|
|||
|
Stock-based compensation
|
322
|
|
|
331
|
|
|||
|
Net operating loss carryforwards
|
12,332
|
|
|
7,338
|
|
|||
|
Tax credits
|
2,328
|
|
|
1,084
|
|
|||
|
Other assets
|
176
|
|
|
108
|
|
|||
|
Total gross deferred tax assets
|
196,701
|
|
|
329,145
|
|
|||
Valuation allowance
|
(10,114
|
)
|
|
(15,568
|
)
|
||||
Total deferred tax assets, net of valuation allowance
|
186,587
|
|
|
313,577
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||||
|
Property and equipment
|
(673
|
)
|
|
(370
|
)
|
|||
|
Total gross deferred tax liabilities
|
(673
|
)
|
|
(370
|
)
|
|||
Net deferred tax assets
|
$
|
185,914
|
|
|
$
|
313,207
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Numerator:
|
|
|
|
|
|
||||||||
|
Net income
|
$
|
8,884
|
|
|
$
|
22,146
|
|
|
$
|
3,124
|
|
|
|
Less: net income attributable to non-controlling interests
|
9,204
|
|
|
9,700
|
|
|
11,900
|
|
||||
|
Net income (loss) attributable to Shake Shack Inc.
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|
$
|
(8,776
|
)
|
|
Denominator:
|
|
|
|
|
|
||||||||
|
Weighted-average shares of Class A common stock outstanding—basic
|
25,876
|
|
|
22,956
|
|
|
13,588
|
|
||||
|
Effect of dilutive securities:
|
|
|
|
|
|
|||||||
|
|
Stock options
|
—
|
|
|
493
|
|
|
—
|
|
|||
|
Weighted-average shares of Class A common stock outstanding—diluted
|
25,876
|
|
|
23,449
|
|
|
13,588
|
|
||||
|
|
|
|
|
|
|
|
||||||
Earnings (loss) per share of Class A common stock—basic
|
$
|
(0.01
|
)
|
|
$
|
0.54
|
|
|
$
|
(0.65
|
)
|
||
Earnings (loss) per share of Class A common stock—diluted
|
$
|
(0.01
|
)
|
|
$
|
0.53
|
|
|
$
|
(0.65
|
)
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Stock options
(1)
|
1,719,341
|
|
(3)
|
|
125
|
|
(2)
|
|
2,574,981
|
|
(3)
|
||
Performance stock units
(1)
|
124,842
|
|
(3)
|
|
26,860
|
|
(4)
|
|
—
|
|
|
||
Restricted stock units
(1)
|
44,476
|
|
(3)
|
|
—
|
|
|
|
—
|
|
|
||
Shares of Class B common stock
|
10,250,007
|
|
(5)
|
|
11,253,592
|
|
(5)
|
|
16,460,741
|
|
(5)
|
(1)
|
Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted earnings per share.
|
(2)
|
Excluded from the computation of diluted earnings per share of Class A common stock because the exercise price of the stock options exceeded the average market price of our Class A common stock during the period ("out-of-the-money").
|
(3)
|
Excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive.
|
(4)
|
Weighted-average number of securities excluded from the computation of diluted earnings per share of Class A common stock because the performance conditions were not met for a portion of the fiscal year.
|
(5)
|
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.
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cash paid for:
|
|
|
|
|
|
|||||||
|
Income taxes, net of refunds
|
$
|
2,261
|
|
|
$
|
1,823
|
|
|
$
|
416
|
|
|
Interest, net of amounts capitalized
|
1,106
|
|
|
54
|
|
|
92
|
|
|||
Non-cash investing activities:
|
|
|
|
|
|
|||||||
|
Accrued purchases of property and equipment
|
7,526
|
|
|
6,150
|
|
|
4,904
|
|
|||
|
Capitalized landlord assets for leases where we are deemed the accounting owner
|
10,125
|
|
|
1,985
|
|
|
—
|
|
|||
|
Capitalized equity-based compensation
|
109
|
|
|
139
|
|
|
—
|
|
|||
|
Class A common stock issued in connection with the acquisition of the former indirect members of SSE Holdings
|
—
|
|
|
—
|
|
|
6
|
|
|||
|
Class A common stock issued in connection with the USC Merger
|
—
|
|
|
—
|
|
|
2
|
|
|||
Non-cash financing activities:
|
|
|
|
|
|
|||||||
|
Cancellation of Class B common stock in connection with the Organizational Transactions
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||
|
Class A common stock issued in connection with the redemption of LLC Interests
|
1
|
|
|
5
|
|
|
6
|
|
|||
|
Cancellation of Class B common stock in connection with the redemption of LLC Interests
|
(1
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|||
|
Cancellation of Class B common stock in connection with the USC Merger
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
|
Establishment of liabilities under tax receivable agreement
|
18,973
|
|
|
100,063
|
|
|
173,090
|
|
|||
|
Accrued distributions payable to non-controlling interest holders
|
—
|
|
|
607
|
|
|
—
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
United States
|
$
|
348,575
|
|
|
$
|
260,602
|
|
|
$
|
184,408
|
|
|
Other countries
|
10,235
|
|
|
7,873
|
|
|
6,184
|
|
||||
Total revenue
|
$
|
358,810
|
|
|
$
|
268,475
|
|
|
$
|
190,592
|
|
|
|
|
|
2017
|
|
|||||||||||||
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
||||
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
||||
Total revenue
|
$
|
76,749
|
|
|
$
|
91,316
|
|
|
$
|
94,609
|
|
|
$
|
96,136
|
|
||
Operating income
|
5,628
|
|
|
11,737
|
|
|
10,610
|
|
|
5,838
|
|
||||||
Net income (loss)
|
3,862
|
|
|
8,184
|
|
|
7,870
|
|
|
(11,032
|
)
|
||||||
Net income (loss) attributable to Shake Shack Inc.
|
2,267
|
|
|
4,879
|
|
|
4,997
|
|
|
(12,463
|
)
|
||||||
Earnings (loss) per share
(1)
:
|
|
|
|
|
|
|
|
||||||||||
|
Basic
|
$
|
0.09
|
|
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
$
|
(0.47
|
)
|
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
$
|
(0.47
|
)
|
|
|
|
2016
|
|
|||||||||||||
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
||||
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
||||
Total revenue
|
$
|
54,165
|
|
|
$
|
66,472
|
|
|
$
|
74,567
|
|
|
$
|
73,271
|
|
||
Operating income
|
4,714
|
|
|
8,933
|
|
|
9,170
|
|
|
4,988
|
|
||||||
Net income
|
3,351
|
|
|
6,549
|
|
|
6,789
|
|
|
5,457
|
|
||||||
Net income attributable to Shake Shack Inc.
|
1,462
|
|
|
3,298
|
|
|
3,766
|
|
|
3,920
|
|
||||||
Earnings per share
(1)
:
|
|
|
|
|
|
|
|
||||||||||
|
Basic
|
$
|
0.07
|
|
|
$
|
0.15
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
|
Diluted
|
$
|
0.07
|
|
|
$
|
0.14
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
(1)
|
Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per share amounts may not equal annual basic and diluted earnings per share amounts.
|
|
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
||
ASSETS
|
|
|
|
||||||
Current assets:
|
|
|
|
||||||
|
Cash
|
$
|
4,988
|
|
|
$
|
3,785
|
|
|
|
Accounts receivable
|
—
|
|
|
2
|
|
|||
|
Prepaid expenses
|
100
|
|
|
105
|
|
|||
|
Total current assets
|
5,088
|
|
|
3,892
|
|
|||
Deferred income taxes, net
|
185,750
|
|
|
312,802
|
|
||||
Investment in subsidiaries
|
142,314
|
|
|
109,680
|
|
||||
TOTAL ASSETS
|
$
|
333,152
|
|
|
$
|
426,374
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||||
Current liabilities:
|
|
|
|
||||||
|
Accrued expenses
|
70
|
|
|
49
|
|
|||
|
Due to SSE Holdings
|
4,217
|
|
|
1,655
|
|
|||
|
Current portion of liabilities under tax receivable agreement
|
937
|
|
|
4,580
|
|
|||
|
Total current liabilities
|
5,224
|
|
|
6,284
|
|
|||
Liabilities under tax receivable agreement, net of current portion
|
158,436
|
|
|
267,902
|
|
||||
Total liabilities
|
163,660
|
|
|
274,186
|
|
||||
Commitments and contingencies
|
|
|
|
||||||
Stockholders' equity:
|
|
|
|
||||||
|
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
|
—
|
|
|
—
|
|
|||
|
Class A common stock, $0.001 par value—200,000,000 shares authorized; 26,527,477 and 25,151,384 shares issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
|
27
|
|
|
25
|
|
|||
|
Class B common stock, $0.001 par value—35,000,000 shares authorized; 10,250,007 and 11,253,592 shares issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
|
10
|
|
|
11
|
|
|||
|
Additional paid-in capital
|
153,105
|
|
|
135,448
|
|
|||
|
Retained earnings
|
16,399
|
|
|
16,719
|
|
|||
|
Accumulated other comprehensive loss
|
(49
|
)
|
|
(15
|
)
|
|||
|
Total stockholders' equity
|
169,492
|
|
|
152,188
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
333,152
|
|
|
$
|
426,374
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|
December 30
2015 |
|
|||
Intercompany revenue
|
$
|
1,466
|
|
|
$
|
1,603
|
|
|
$
|
1,336
|
|
||
TOTAL REVENUE
|
1,466
|
|
|
1,603
|
|
|
1,336
|
|
|||||
General and administrative expenses
|
1,692
|
|
|
1,603
|
|
|
1,336
|
|
|||||
TOTAL EXPENSES
|
1,692
|
|
|
1,603
|
|
|
1,336
|
|
|||||
OPERATING LOSS
|
(226
|
)
|
|
—
|
|
|
—
|
|
|||||
Equity in net income of subsidiaries
|
22,090
|
|
|
16,982
|
|
|
6,906
|
|
|||||
Other income
|
127,221
|
|
|
688
|
|
|
—
|
|
|||||
Interest expense
|
(50
|
)
|
|
(16
|
)
|
|
—
|
|
|||||
INCOME BEFORE INCOME TAXES
|
149,035
|
|
|
17,654
|
|
|
6,906
|
|
|||||
Income tax expense
|
149,355
|
|
|
5,208
|
|
|
2,633
|
|
|||||
NET INCOME (LOSS)
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|
$
|
4,273
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|
December 30
2015 |
|
|||
Net income (loss)
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|
$
|
4,273
|
|
||
Other comprehensive (loss), net of tax:
|
|
|
|
|
|
||||||||
|
Available-for-sale securities
(1)
:
|
|
|
|
|
|
|||||||
|
|
Change in net unrealized holding (losses)
|
(67
|
)
|
|
(22
|
)
|
|
(5
|
)
|
|||
|
|
Less: reclassification adjustments for net realized losses included in net income
|
33
|
|
|
12
|
|
|
—
|
|
|||
|
|
Net change
|
(34
|
)
|
|
(10
|
)
|
|
(5
|
)
|
|||
OTHER COMPREHENSIVE LOSS
|
(34
|
)
|
|
(10
|
)
|
|
(5
|
)
|
|||||
COMPREHENSIVE INCOME (LOSS)
|
$
|
(354
|
)
|
|
$
|
12,436
|
|
|
$
|
4,268
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
|
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|
December 30
2015 |
|
|||
OPERATING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Net income (loss)
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|
$
|
4,273
|
|
|||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|||||||||||
|
Equity in net income of subsidiaries
|
(22,090
|
)
|
|
(16,982
|
)
|
|
(6,906
|
)
|
|||||||
|
Equity-based compensation
|
234
|
|
|
189
|
|
|
330
|
|
|||||||
|
Non-cash reimbursement revenue treated as investment
|
—
|
|
|
(189
|
)
|
|
—
|
|
|||||||
|
Deferred income taxes
|
146,095
|
|
|
(462
|
)
|
|
(551
|
)
|
|||||||
|
Other non-cash income
|
(127,221
|
)
|
|
(688
|
)
|
|
—
|
|
|||||||
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||||||
|
|
Accounts receivable
|
2
|
|
|
(2
|
)
|
|
—
|
|
||||||
|
|
Prepaid expenses and other current assets
|
5
|
|
|
(1
|
)
|
|
—
|
|
||||||
|
|
Due to/from SSE Holdings
|
(5,339
|
)
|
|
214
|
|
|
4
|
|
||||||
|
|
Accrued expenses
|
21
|
|
|
(11
|
)
|
|
58
|
|
||||||
|
|
Other current liabilities
|
(17
|
)
|
|
17
|
|
|
—
|
|
||||||
|
|
Income taxes payable
|
2,990
|
|
|
5,023
|
|
|
3,184
|
|
||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
(5,640
|
)
|
|
(446
|
)
|
|
392
|
|
||||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Purchases of LLC Interests from SSE Holdings
|
(5,522
|
)
|
|
(4,559
|
)
|
|
(112,298
|
)
|
||||||||
Return of investment in SSE Holdings
|
4,101
|
|
|
2,694
|
|
|
—
|
|
||||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(1,421
|
)
|
|
(1,865
|
)
|
|
(112,298
|
)
|
||||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
|
—
|
|
|
—
|
|
|
112,298
|
|
||||||||
Proceeds from issuance of Class A common stock to SSE Holdings upon settlement of stock option exercises
|
5,522
|
|
|
2,489
|
|
|
—
|
|
||||||||
Proceeds from issuance of Class B common stock
|
—
|
|
|
—
|
|
|
30
|
|
||||||||
Proceeds from stock option exercises
|
7,586
|
|
|
3,185
|
|
|
—
|
|
||||||||
Payments under tax receivable agreement
|
(4,844
|
)
|
|
—
|
|
|
—
|
|
||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
8,264
|
|
|
5,674
|
|
|
112,328
|
|
||||||||
INCREASE IN CASH
|
1,203
|
|
|
3,363
|
|
|
422
|
|
||||||||
CASH AT BEGINNING OF PERIOD
|
3,785
|
|
|
422
|
|
|
—
|
|
||||||||
CASH AT END OF PERIOD
|
$
|
4,988
|
|
|
$
|
3,785
|
|
|
$
|
422
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cash paid for:
|
|
|
|
|
|
|||||||||||
|
Income taxes
|
$
|
253
|
|
|
$
|
576
|
|
|
$
|
—
|
|
||||
|
Interest
|
2
|
|
|
—
|
|
|
—
|
|
|||||||
Non-cash investing activities:
|
|
|
|
|
|
|||||||||||
|
Accrued contribution related to stock option exercises
|
7,586
|
|
|
1,116
|
|
|
—
|
|
|||||||
|
Class A common stock issued in connection with the acquisition of two entities owned by former indirect members of SSE Holdings
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
|
Class A common stock issued in connection with the USC Merger
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
|
Class A common stock issued in connection with the acquisition of LLC Interests upon redemption by the non-controlling interest holders
|
4,415
|
|
|
18,944
|
|
|
19,933
|
|
|||||||
|
Non-cash contribution made in connection with equity awards granted to employees of SSE Holdings
|
5,497
|
|
|
5,304
|
|
|
2,355
|
|
|||||||
Non-cash financing activities:
|
|
|
|
|
|
|||||||||||
|
Cancellation of Class B common stock in connection with the Organizational Transactions
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||||
|
Cancellation of Class B common stock in connection with the redemption of LLC Interests
|
(1
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|||||||
|
Cancellation of Class B common stock in connection with the USC Merger
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
|
Establishment of liabilities under tax receivable agreement
|
18,973
|
|
|
100,063
|
|
|
173,090
|
|
|
|
|
Balance at beginning of period
|
|
|
Additions
|
|
|
Reductions
|
|
|
Balance at end of period
|
|
||||||||
(in thousands)
|
|
|
Charged to costs and expenses
|
|
|
Charged to other accounts
|
|
|
|
|||||||||||
Deferred tax asset valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal year ended December 31, 2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fiscal year ended December 30, 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,700
|
|
(1)
|
$
|
(16,545
|
)
|
|
$
|
23,155
|
|
Fiscal year ended December 28, 2016
|
|
$
|
23,155
|
|
|
$
|
90
|
|
|
$
|
1,965
|
|
(1)
|
$
|
(9,642
|
)
|
|
$
|
15,568
|
|
Fiscal year ended December 27, 2017
|
|
$
|
15,568
|
|
|
$
|
—
|
|
|
$
|
3,455
|
|
(1)
|
$
|
(8,909
|
)
|
(2)
|
$
|
10,114
|
|
(1)
|
Amount relates to a valuation allowance established on deferred tax assets related to our investment in SSE Holdings.
|
(2)
|
Amount includes a
$4,780
remeasurement adjustment related to the enactment of the TCJA, which was recognized through earnings.
|
|
|
|
(a)
|
The following documents are filed as part of this report:
|
(1)
|
Financial Statements
|
|
Page
|
(2)
|
Financial Statement Schedules
|
(1)
|
Exhibits
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed
Herewith
|
||||
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
||
|
|
8-K
|
|
3.1
|
|
2/10/2015
|
|
|
||
|
|
8-K
|
|
3.2
|
|
2/10/2015
|
|
|
||
|
|
S-1/A
|
|
4.1
|
|
1/28/2015
|
|
|
||
|
|
8-K
|
|
10.3
|
|
2/10/2015
|
|
|
||
|
|
POSAM
|
|
10.1.1
|
|
3/10/2016
|
|
|
||
|
|
10-K
|
|
10.1.2
|
|
3/13/2017
|
|
|
||
|
|
S-1
|
|
10.13
|
|
12/29/2014
|
|
|
||
|
|
8-K
|
|
10.1
|
|
2/10/2015
|
|
|
||
|
|
8-K
|
|
10.2
|
|
2/10/2015
|
|
|
||
|
|
10-Q
|
|
10.2
|
|
11/6/2015
|
|
|
||
|
|
8-K
|
|
10.4
|
|
2/10/2015
|
|
|
||
|
|
10-Q
|
|
10.1
|
|
11/6/2015
|
|
|
||
|
|
10-Q
|
|
10.2
|
|
8/4/2017
|
|
|
||
|
|
10-K
|
|
10.6
|
|
3/27/2015
|
|
|
||
|
|
S-1/A
|
|
10.6
|
|
1/20/2015
|
|
|
||
|
|
S-1/A
|
|
10.21
|
|
1/20/2015
|
|
|
||
†
|
|
S-1
|
|
10.7
|
|
12/29/2014
|
|
|
||
†
|
|
S-1
|
|
10.8
|
|
12/29/2014
|
|
|
||
†
|
|
S-1
|
|
10.9
|
|
12/29/2014
|
|
|
||
†
|
|
S-1
|
|
10.10
|
|
12/29/2014
|
|
|
||
†
|
|
S-8
|
|
4.4
|
|
1/30/2015
|
|
|
||
†
|
|
10-Q
|
|
10.1
|
|
5/16/2016
|
|
|
||
†
|
|
S-1/A
|
|
10.19
|
|
1/20/2015
|
|
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed
Herewith
|
||||
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
||
†
|
|
S-1/A
|
|
10.20
|
|
1/20/2015
|
|
|
||
†
|
|
10-Q
|
|
10.2
|
|
5/16/2016
|
|
|
||
†
|
|
10-Q
|
|
10.3
|
|
5/16/2016
|
|
|
||
†
|
|
S-1
|
|
10.12
|
|
12/29/2014
|
|
|
||
†
|
|
S-1
|
|
10.17
|
|
12/29/2014
|
|
|
||
†
|
|
S-1
|
|
10.18
|
|
12/29/2014
|
|
|
||
†
|
|
S-1
|
|
10.14
|
|
12/29/2014
|
|
|
||
†
|
|
S-1
|
|
10.15
|
|
12/29/2014
|
|
|
||
†
|
|
S-1
|
|
10.16
|
|
12/29/2014
|
|
|
||
†
|
|
S-1/A
|
|
10.22
|
|
1/20/2015
|
|
|
||
†
|
|
10-Q
|
|
10.4
|
|
5/16/2016
|
|
|
||
†
|
|
8-K
|
|
10.1
|
|
11/2/2016
|
|
|
||
†
|
|
8-K
|
|
10.1
|
|
1/5/2017
|
|
|
||
†
|
|
8-K
|
|
10.1
|
|
5/1/2017
|
|
|
||
†
|
|
|
|
|
|
|
|
*
|
||
†
|
|
|
|
|
|
|
|
*
|
||
†
|
|
|
|
|
|
|
|
*
|
||
|
|
|
|
|
|
|
|
*
|
||
|
|
|
|
|
|
|
|
*
|
||
|
|
|
|
|
|
|
|
*
|
||
|
|
|
|
|
|
|
|
*
|
||
|
|
|
|
|
|
|
|
#
|
||
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)
|
|
|
|
|
|
By:
|
/s/ Tara Comonte
|
|
|
Tara Comonte
|
Date: February 26, 2018
|
|
Chief Financial Officer
|
Signature
|
|
Title
|
Date
|
|
|
|
February 26, 2018
|
/s/ Randy Garutti
|
|
Chief Executive Officer and Director
|
|
Randy Garutti
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Tara Comonte
|
|
Chief Financial Officer
|
February 26, 2018
|
Tara Comonte
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
/s/ Daniel Meyer
|
|
Chairman of the Board of Directors
|
February 26, 2018
|
Daniel Meyer
|
|
|
|
|
|
|
|
/s/ Anna Fieler
|
|
Director
|
February 26, 2018
|
Anna Fieler
|
|
|
|
|
|
|
|
/s/ Jeff Flug
|
|
Director
|
February 26, 2018
|
Jeff Flug
|
|
|
|
|
|
|
|
/s/ Jenna Lyons
|
|
Director
|
February 26, 2018
|
Jenna Lyons
|
|
|
|
|
|
|
|
/s/ Joshua Silverman
|
|
Director
|
February 26, 2018
|
Joshua Silverman
|
|
|
|
|
|
|
|
/s/ Jonathan D. Sokoloff
|
|
Director
|
February 26, 2018
|
Jonathan D. Sokoloff
|
|
|
|
|
|
|
|
/s/ Robert Vivian
|
|
Director
|
February 26, 2018
|
Robert Vivian
|
|
|
|
Legal Name
|
|
State of Incorporation
|
SSE Holdings, LLC
|
|
Delaware
|
Shake Shack Enterprises, LLC
|
|
New York
|
Shake Shack Enterprises International, LLC
|
|
New York
|
SSE IP, LLC
|
|
Delaware
|
Shake Shack Domestic Licensing LLC
|
|
Delaware
|
Shake Shack Mobile LLC
|
|
Delaware
|
Shake Shack Texas Management Company LLC
|
|
Texas
|
Shake Shack Texas Holding Company LLC
|
|
Texas
|
Shake Shack Texas Beverage Company LLC
|
|
Texas
|
(1)
|
The subsidiaries listed above represent the registrant’s subsidiaries as of
December 27, 2017
.
|
(2)
|
Pursuant to Item 601(b)(21)(ii) of Regulation S-K, the names of consolidated wholly-owned subsidiaries carrying on the same line of business have been omitted. In total, the names of 86 subsidiaries have been omitted, none of which operated outside the United States.
|
1.
|
I have reviewed this Annual Report on Form 10-K 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: February 26, 2018
|
|
|
/s/ Randy Garutti
|
|
Randy Garutti
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K 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: February 26, 2018
|
|
|
/s/ Tara Comonte
|
|
Tara Comonte
|
|
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: February 26, 2018
|
|
|
/s/ Randy Garutti
|
|
Randy Garutti
|
|
Chief Executive Officer and Director
|
Date: February 26, 2018
|
|
|
/s/ Tara Comonte
|
|
Tara Comonte
|
|
Chief Financial Officer
|