|
|
(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 26, 2018
|
|||||
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
|
|||||
|
|
|
|
|
|
|
|
|
Delaware
|
|
47-1941186
|
||
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
||
225 Varick Street, Suite 301, New York, New York
|
|
10014
|
||
(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
|
|
Smaller reporting company
|
o
|
|
|
|
Emerging growth company
|
o
|
DOCUMENTS INCORPORATED BY REFERENCE
|
Portions of the registrant’s definitive Proxy Statement for its 2019 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K.
|
|
|
||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|
|
|
|
▪
|
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").
|
|
|
|
Burgers & Chicken
|
Our burgers are made with a proprietary whole-muscle blend of 100% all-natural, hormone and antibiotic-free Angus beef, ground fresh daily, cooked to order and served on a non-GMO potato bun. We take great care in the preparation of our burgers—from sourcing, to handling, to cooking—to strive that the taste and quality of the burgers we serve is second to none. Our signature burger is the ShackBurger
®
, which is a four-ounce cheeseburger topped with lettuce, tomato and ShackSauce™. Our burger offerings also include the SmokeShack
®
, 'Shroom Burger™ (our vegetarian burger), Shack Stack
®
and Hamburger. Our Chick’n Shack™ is a 100% all-natural, hormone and antibiotic-free cage-free chicken breast, slow cooked in buttermilk herbs, hand-battered, hand-breaded and crisp-fried to order.
|
|
Crinkle Cut Fries
|
Our classic and passionately loved crinkle cut fries are made from premium Yukon potatoes and are prepared 100% free of artificial trans-fat. Guests can also enjoy our Cheese Fries, which are our crinkle cut fries topped with a proprietary blend of cheddar and American cheese sauce. We believe the tactile pleasure and emotional attachment that our guests have to the crispiness and ridges of our crinkle cut fries is a nostalgic ode to the roadside burger stand of yesteryear.
|
|
|
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
®
is sourced and produced exclusively by Gotham Project, which accentuates our fine dining ethos and provides 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.
|
▪
|
Griddled Chick'n
— In January 2018 we rolled out our Griddled Chick'n—our all-natural chicken breast topped with Niman Ranch smoked bacon, lettuce, tomato and buttermilk herb mayo. The Griddled Chick'n premiered exclusively on the Shack App before being offered nationwide.
|
▪
|
Smoked Cheddar BBQ Lineup
— In April 2018 we launched a limited-edition lineup of Sm
oked Cheddar BBQ items nationwide. The Smoked Cheddar BBQ Bacon Burger is a 100
% all-natural Angus beef cheeseburger with smoked cheddar cheese, Niman Ranch smoked bacon, pickles and Shack BBQ sauce; the Smoked Cheddar BBQ Bacon Griddled Chick'n is griddled all-natural chicken breast with smoked cheddar cheese, Niman Ranch smoked bacon, pickles and Shack BBQ sauce; and the Smoked Cheddar BBQ Bacon Cheese Fries are crinkle-cut fries topped with all-natural smoked Niman Ranch bacon, Shack BBQ Sauce and cheese sauce.
|
▪
|
Hot Chick'n
— In September 2018 we brought back a
spicy favorite, our Hot Chick'n. In fiscal 2017 we launched Hot Chick'n as a limited-time menu item, and by popular demand, brought it back and made it customizable
—with "hot" or "even hotter" optional.
Our Hot Chick'n
is crafted from an all-natural chicken breast—no hormones or antibiotics—slow-cooked in a creamy buttermilk marinade, hand-dipped into Shack-made batter, dredged through seasoned flour and crisp-fried. The sandwich is dusted with a guajillo and cayenne pepper blend and topped with Louisiana hot sauce slaw, kosher dill pickles and served on the same non-GMO potato bun as the classic ShackBurger.
|
▪
|
Trio of Featured Shakes
— Throughout 2018 we offered 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: Chocolate Chip Red Velvet, Mint Cookies & Cream and Apple Pie à la Mode and White Mocha, Christmas Cookie; Marshmallow Chocolate Chip, Chocolate Brownie and Mocha Cookies & Cream; and Chocolate Peppermint. In 2019, we will be featuring a new shake each month, kicking January off with the Tiramisu shake and the Salted Vanilla Toffee shake in February.
|
▪
|
Veggie Shack
— In April 2018 we launched our first veggie burger at select Shacks, and by the end of the year it was available at 18 Shacks. The Veggie Shack
is made with black beans, brown rice and roasted beets topped with provolone cheese, lettuce, tomato, onions, pickles and vegan mustard mayo. It can also be made entirely vegan by removing the cheese and substituting a gluten free bun or lettuce wrap.
|
▪
|
BBQ Pulled Pork
— In July 2018 we offered our
BBQ Pulled Pork Burger on the app at select New York City and New Jersey Shacks. The BBQ Pulled Pork Burger is a cheeseburger topped with Niman Ranch BBQ pulled pork, jalapeño slaw and pickles.
|
▪
|
Chick'n Bites
— In September 2018, we launched Chick'n Bites exclusively at our West Village Shack. Chick'n Bites are crispy pieces of hand-breaded chicken breast, served with BBQ or honey mustard sauces, and available in a six-piece or 10-piece order size. In later September and October, Chick'n Bites were rolled out at select New York City Shacks and other markets across the country.
|
•
|
Montlake Double Cut
—
In October 2018, we introduced our Seattle-exclusive burger, the Montlake Double Cut, which features a W
ashington State all-natural beef double cheeseburger with Beecher’s ‘Just Jack’ cheese, caramelized onions and grainy mustard mayo on a Macrina Bakery bun.
It was important to us to introduce something truly local to this proud food town and continue to show our culinary heritage and differentiation.
This exclusive burger is available daily in limited quantities.
|
•
|
Golden Gate Double Shack
—
In December 2018, we introduced the Golden Gate Double Shack at our Palo Alto opening, which featured two grass-fed beef patties from Northern California’s Richards Grassfed Beef. In addition to the burger,
|
▪
|
Breakfast Taco and Chick'n de Sanchez
— In February 2018 we partnere
d with Rosio Sanchez, chef and founder of Copenhagen’s Sanchez and Hija de Sanchez, to bring New York City a two-part, one-day-only collaboration. At the Madison Square Park Shack, we served the brand-new, limited-edition Breakfast Taco and Chick’n de Sanchez. The Breakfast Taco featured roast pork belly, cured egg yolk, avocado and habanero salsa in a fresh-made corn tortilla, and the Chick’n de Sanchez featured a crispy chicken breast with spicy arbol oil, guajillo chili mayo, avocado, pickled onions, Boston lettuce and crema.
|
▪
|
Shack Cheesesteak
— In April 2018 we teamed up with our longtime partner, famed butcher Pat LaFrieda, to bring New York City a one-day-only, limited edition Shack Cheesesteak. The Shack Cheesesteak
featured Pat LaFrieda Meat Purveyors shaved steak, Shack Cheddar and American cheese sauce, caramelized onions and chopped cherry peppers on a hero roll. Additionally, $1 from every Shack Cheesesteak purchased benefited the Bob Woodruff Foundation, an organization that invests to find, fund and shape programs that works to empower impacted veterans, service members and their families.
|
▪
|
Lilia Burger
— To welcome our new Williamsburg Shack to Brooklyn in June 2018, we collaborated with chef Missy Robins, of the local Italian restaurant Lilia, to create the Lilia Burger—
a double hamburger brushed with garlic herb butter and topped with parmigiana fonduta
—offered specifically for opening day at the Shack. Additionally for the Williamsburg opening day, we premiered the Shack's exclusive concretes, created through collaborations with local vendors, including the "Just Du It", "Shack Attack" and "Pie Oh-My" concretes which features mix-ins from Du's Donuts, Mast Brother Chocolate and Four & Twenty Blackbirds, all of which are permanent menu items exclusive to the Williamsburg Shack.
|
▪
|
Ludo Shack and Salted Caramel Wakame Shake
— For one day only in October at the Madison Square Park Shack, we collaborated with chef Ludo Lefebvre to serve the Ludo Shack and Salted Caramel Wakame Shake.
The Ludo Shack is a double cheeseburger topped with bordelaise and special sauce, our interpretation of Ludo’s famous Big Mec burger. The Salted Caramel Wakame Shake is our classic salted caramel shake with a twist: Wakame edible seaweed!
|
▪
|
LOVE SHACK SHAKE with the B52s
– For Valentine's Day, we teamed up with the famed music group The B-52s, to create the Love Shack Shake–a strawberry blonde milkshake topped with whipped cream and glitter sprinkles–offered for a limited time in February. Additionally, for every Love Shack sold, Shake Shack donated $2 to Canine Companions for Independence, a non-profit that enhances the lives of people with disabilities by providing highly trained assistance dogs and a lifetime of support entirely free of charge.
|
▪
|
Team Mr8 Shack
—
In April 2018 the Newbury Street Shack kicked off marathon Monday in Boston with its exclusive Team Mr8 Shake – vanilla custard blended with fudge and peanut butter sauces, topped with whipped cream and chocolate sprinkles. All proceeds from the shake went to Team Mr8, the Martin Richard Foundation, which provides opportunities for young people to learn, grow and lead through volunteerism and community engagement.
|
▪
|
PRIDE
—
Throughout the month of June, we participated in Pride activations throughout the country, including the Pride parades in New York City, Washington D.C., Chicago, Los Angeles, San Diego and Lexington. Our teams were decked
|
▪
|
Coachella and Stagecoach Music and Arts Festival
– In April 2018 we were excited to serve up our classic menu items at the Coachella Music and Arts Festival and Stagecoach Festival for three three-day weekends in California, where we set-up our first-ever festival kiosk model.
|
▪
|
Allbirds Collaboration
– For one day only in May at the Madison Square Park Shack, we set up shop with Allbirds and offered one-of-a-kind Shake Shack Tree Runners, a custom limited-edition lace kit and a Hokey Pokey shake – inspired by Allbirds’ New Zealand roots, which featured honeycomb candy and chocolate, topped with whipped cream and toffee.
|
▪
|
Shake Shack X Canlis Backlot Pop-Up
– To celebrate Seattle's first taste of Shake Shack, in June 2018, we partnered with Canlis, a Westlake fine dining institution, to serve-up Shake Shack classics plus Canlis Dungeness Crab melts, and créme brülée Whoopie pies, as well as featuring live music, all taking place in the backlot of Canlis.
|
▪
|
Shake Shack X Bob's Burgers Pop-Up
– In preparation for the kick-off of Comic-Con, and in celebration of the 150th episode of
Fox's
sitcom
Bobs Burgers
, we decorated our Mission Valley Shack in San Diego with
Bob's Burgers
artwork, including a replica of the show's iconic dining counter. We offered a "Burger of the Day" just as Bob would, called "Can I have your Slaw-tograph Burger"– a cheeseburger topped with barbecue pulled pork, jalapeño, pickles and scallion slaw.
|
▪
|
Shake Shack X Ralph's Italian Ices Pop-Up
– In anticipation of Shake Shack's opening at the Staten Island Mall, we popped up at the original Ralph's Famous Italian Ices & Ice Cream. We served-up a limited menu featuring ShackBurgers and crinkle-cut fries alongside Ralph's full menu, along with a one-day only collaboration, the Strawberry SHACKcake Italian Ice.
|
▪
|
Our total revenue grew from
$118.5 million
in fiscal 2014 to
$459.3 million
in fiscal
2018
, a
40%
CAGR. Compared to fiscal
2017
, total revenue increased
28.0%
in fiscal
2018
.
|
▪
|
Net income attributable to Shake Shack Inc. for fiscal
2018
was
$15.2 million
, compared to a loss of
$0.3 million
for fiscal
2017
.
|
▪
|
Adjusted EBITDA, a non-GAAP measure, increased
14%
to
$73.9 million
for fiscal
2018
from
$64.7 million
for fiscal
2017
. For a reconciliation of Adjusted EBITDA to net income, see "Non-GAAP Financial Measures—EBITDA and Adjusted EBITDA" in Part II, Item 7.
|
▪
|
Adjusted pro forma net
income
, a non-GAAP measure,
increase
d
28.0%
to
$26.9 million
, or
$0.71
per fully exchanged and diluted share in fiscal
2018
, compared to
$21.0 million
, or
$0.57
per fully exchanged and diluted share in fiscal
2017
.
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.
|
|
|
(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
|
|
43
|
|
Chief Executive Officer and Director
|
Tara Comonte
|
|
44
|
|
Chief Financial Officer
|
Zachary Koff
|
|
39
|
|
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 ("ADA") 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
|
|
Alabama
|
1
|
|
|
—
|
|
|
1
|
|
Arizona
|
3
|
|
|
—
|
|
|
3
|
|
California
|
11
|
|
|
1
|
|
|
12
|
|
Colorado
|
2
|
|
|
—
|
|
|
2
|
|
Connecticut
|
4
|
|
|
—
|
|
|
4
|
|
Delaware
|
1
|
|
|
—
|
|
|
1
|
|
District of Columbia
|
6
|
|
|
1
|
|
|
7
|
|
Florida
|
10
|
|
|
—
|
|
|
10
|
|
Georgia
|
2
|
|
|
1
|
|
|
3
|
|
Illinois
|
6
|
|
|
—
|
|
|
6
|
|
Kentucky
|
1
|
|
|
—
|
|
|
1
|
|
Maryland
|
4
|
|
|
1
|
|
|
5
|
|
Massachusetts
|
5
|
|
|
—
|
|
|
5
|
|
Michigan
|
2
|
|
|
—
|
|
|
2
|
|
Minnesota
|
2
|
|
|
—
|
|
|
2
|
|
Missouri
|
2
|
|
|
—
|
|
|
2
|
|
North Carolina
|
2
|
|
|
—
|
|
|
2
|
|
Nevada
|
4
|
|
|
1
|
|
|
5
|
|
New Jersey
|
5
|
|
|
—
|
|
|
5
|
|
New York
|
28
|
|
|
5
|
|
|
33
|
|
Ohio
|
1
|
|
|
—
|
|
|
1
|
|
Pennsylvania
|
5
|
|
|
1
|
|
|
6
|
|
Tennessee
|
1
|
|
|
—
|
|
|
1
|
|
Texas
|
11
|
|
|
1
|
|
|
12
|
|
Virginia
|
3
|
|
|
—
|
|
|
3
|
|
Washington
|
1
|
|
|
—
|
|
|
1
|
|
Wisconsin
|
1
|
|
|
—
|
|
|
1
|
|
Domestic
|
124
|
|
|
12
|
|
|
136
|
|
Bahrain
|
—
|
|
|
2
|
|
|
2
|
|
China
|
—
|
|
|
2
|
|
|
2
|
|
Japan
|
—
|
|
|
10
|
|
|
10
|
|
Korea
|
—
|
|
|
7
|
|
|
7
|
|
Kuwait
|
—
|
|
|
10
|
|
|
10
|
|
Oman
|
—
|
|
|
1
|
|
|
1
|
|
Qatar
|
—
|
|
|
4
|
|
|
4
|
|
Russia
|
—
|
|
|
3
|
|
|
3
|
|
Saudi Arabia
|
—
|
|
|
9
|
|
|
9
|
|
Turkey
|
—
|
|
|
3
|
|
|
3
|
|
United Arab Emirates
|
—
|
|
|
12
|
|
|
12
|
|
United Kingdom
|
—
|
|
|
9
|
|
|
9
|
|
INTERNATIONAL
|
—
|
|
|
72
|
|
|
72
|
|
SYSTEM-WIDE
|
124
|
|
|
84
|
|
|
208
|
|
|
|
|
|
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
(2)
|
|
|
Equity compensation plans approved by security holders
(1)
|
|
1,360,983
|
|
|
$
|
21.25
|
|
|
3,476,319
|
|
(1)
|
Includes awards granted and available to be granted under our 2015 Incentive Award Plan.
|
(2)
|
This amount represents shares of common stock available for issuance under the 2015 Incentive Award Plan, which include stock options, performance stock units and restricted stock units.
|
|
|
1/30/2015
|
|
|
12/30/2015
|
|
|
12/28/2016
|
|
|
12/27/2017
|
|
|
12/26/2018
|
|
|||||
Shake Shack Inc.
|
$
|
100.00
|
|
|
$
|
87.06
|
|
|
$
|
80.24
|
|
|
$
|
96.60
|
|
|
$
|
94.14
|
|
S&P 500 Index
|
100.00
|
|
|
104.52
|
|
|
117.02
|
|
|
142.57
|
|
|
136.32
|
|
|||||
S&P 600 Restaurants Index
|
100.00
|
|
|
87.80
|
|
|
93.36
|
|
|
90.55
|
|
|
99.55
|
|
(dollar amounts in thousands, except per share amounts)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
(1)
|
|
|||||||
Selected statement of income data:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Shack sales
|
$
|
445,589
|
|
|
$
|
346,388
|
|
|
$
|
259,350
|
|
|
$
|
183,219
|
|
|
$
|
112,042
|
|
||
Licensing revenue
(2)
|
13,721
|
|
|
12,422
|
|
|
9,125
|
|
|
7,373
|
|
|
6,488
|
|
|||||||
Shack-level operating expenses
|
332,683
|
|
|
254,079
|
|
|
186,058
|
|
|
130,345
|
|
|
85,181
|
|
|||||||
General and administrative expenses
|
52,720
|
|
|
39,003
|
|
|
30,556
|
|
|
37,825
|
|
|
18,187
|
|
|||||||
Pre-opening costs
|
12,279
|
|
|
9,603
|
|
|
9,520
|
|
|
5,430
|
|
|
6,105
|
|
|||||||
Operating income
|
31,711
|
|
|
33,813
|
|
|
27,805
|
|
|
6,753
|
|
|
3,143
|
|
|||||||
Net income
|
21,948
|
|
|
8,884
|
|
|
22,146
|
|
|
3,124
|
|
|
2,118
|
|
|||||||
Net income (loss) attributable to Shake Shack Inc.
|
15,179
|
|
|
(320
|
)
|
|
12,446
|
|
|
(8,776
|
)
|
|
2,118
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Per share data:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) per share—basic
|
$
|
0.54
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.54
|
|
|
$
|
(0.65
|
)
|
|
$
|
0.07
|
|
||
Earnings (loss) per share—diluted
|
$
|
0.52
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.53
|
|
|
$
|
(0.65
|
)
|
|
$
|
0.07
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selected balance sheet data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
24,750
|
|
|
$
|
21,507
|
|
|
$
|
11,607
|
|
|
$
|
70,849
|
|
|
$
|
2,677
|
|
||
Short-term marketable securities
|
62,113
|
|
|
63,036
|
|
|
62,040
|
|
|
275
|
|
|
—
|
|
|||||||
Total current assets
|
101,119
|
|
|
93,199
|
|
|
83,944
|
|
|
78,934
|
|
|
7,925
|
|
|||||||
Total assets
|
610,532
|
|
|
470,606
|
|
|
538,194
|
|
|
379,547
|
|
|
82,962
|
|
|||||||
Total current liabilities
|
59,948
|
|
|
34,024
|
|
|
31,716
|
|
|
24,005
|
|
|
48,177
|
|
|||||||
Total debt
|
20,846
|
|
|
14,518
|
|
|
2,007
|
|
|
313
|
|
|
32,313
|
|
|||||||
Total liabilities
|
337,077
|
|
|
246,127
|
|
|
336,841
|
|
|
222,528
|
|
|
70,362
|
|
|||||||
Total equity
|
273,455
|
|
|
224,479
|
|
|
201,353
|
|
|
157,019
|
|
|
12,600
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selected cash flow data:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by operating activities
|
$
|
85,395
|
|
|
$
|
70,878
|
|
|
$
|
54,285
|
|
|
$
|
41,258
|
|
|
$
|
13,584
|
|
||
Net cash used in investing activities
|
(86,604
|
)
|
|
(61,943
|
)
|
|
(114,761
|
)
|
|
(34,514
|
)
|
|
(28,515
|
)
|
|||||||
Net cash provided by financing activities
|
4,452
|
|
|
965
|
|
|
1,234
|
|
|
61,428
|
|
|
4,532
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
(1)
|
|
|||||||
Selected operating data:
|
|
|
|
|
|
|
|
|
|
||||||||||||
System-wide sales
(3)
|
$
|
671,926
|
|
|
$
|
532,137
|
|
|
$
|
402,791
|
|
|
$
|
295,257
|
|
|
$
|
217,442
|
|
||
Same-Shack sales growth
(4)
|
1.0
|
%
|
|
(1.2
|
)%
|
|
4.2
|
%
|
|
13.3
|
%
|
|
4.1
|
%
|
|||||||
Shacks in the comparable base
|
61
|
|
|
43
|
|
|
29
|
|
|
21
|
|
|
13
|
|
|||||||
Average weekly sales
(5)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Domestic company-operated
|
$
|
84
|
|
|
$
|
88
|
|
|
$
|
96
|
|
|
$
|
96
|
|
|
$
|
89
|
|
|
Average unit volumes
(6)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Domestic company-operated
|
$
|
4,390
|
|
|
$
|
4,598
|
|
|
$
|
4,981
|
|
|
$
|
4,976
|
|
|
$
|
4,611
|
|
|
|
International licensed
|
$
|
3,047
|
|
|
$
|
3,176
|
|
|
$
|
3,334
|
|
|
$
|
3,413
|
|
|
$
|
4,588
|
|
|
Shack-level operating profit
(7)
|
$
|
112,906
|
|
|
$
|
92,309
|
|
|
$
|
73,292
|
|
|
$
|
52,874
|
|
|
$
|
26,861
|
|
||
Shack-level operating profit margin
(7)
|
25.3
|
%
|
|
26.6
|
%
|
|
28.3
|
%
|
|
28.9
|
%
|
|
24.0
|
%
|
|||||||
Adjusted EBITDA
(8)
|
$
|
73,850
|
|
|
$
|
64,664
|
|
|
$
|
50,234
|
|
|
$
|
37,011
|
|
|
$
|
14,862
|
|
||
Adjusted EBITDA margin
(8)
|
16.1
|
%
|
|
18.0
|
%
|
|
18.7
|
%
|
|
19.4
|
%
|
|
12.5
|
%
|
|||||||
Shack counts (at end of period):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
System-wide
|
208
|
|
|
159
|
|
|
114
|
|
|
84
|
|
|
63
|
|
||||||
|
Domestic company-operated
|
124
|
|
|
90
|
|
|
64
|
|
|
44
|
|
|
31
|
|
||||||
|
Domestic licensed
|
12
|
|
|
10
|
|
|
7
|
|
|
5
|
|
|
5
|
|
||||||
|
International licensed
|
72
|
|
|
59
|
|
|
43
|
|
|
35
|
|
|
27
|
|
(1)
|
We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year. Fiscal 2018, 2017, 2016, and 2015 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)
|
On December 28, 2017 we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Results for reporting periods beginning on or after December 28, 2017 are presented under Accounting Standards Codification Topic 606 ("ASC 606"). Prior period amounts were not revised and continue to be reported in accordance with ASC Topic 605 ("ASC 605"), the accounting standard then in effect. See Note 3 to the consolidated financial statements for more information.
|
(3)
|
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.
|
(4)
|
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.
|
(5)
|
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.
|
(6)
|
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.
|
(7)
|
See "Non-GAAP Measures—Shack-Level Operating Profit" on page 65 for additional information and a reconciliation to the most directly comparable GAAP financial measure.
|
(8)
|
See "Non-GAAP Measures—EBITDA and Adjusted EBITDA" on page 66 for additional information and a reconciliation to the most directly comparable GAAP financial measure.
|
|
|
•
|
Total revenue
increase
d
28.0%
to
$459.3 million
.
|
•
|
Shack sales
increase
d
28.6%
to
$445.6 million
.
|
•
|
Same-Shack sales increased
1.0%
.
|
•
|
Shack system-wide sales increased
26.3%
to
$671.9 million
|
•
|
Operating income was
$31.7 million
, or
6.9%
of total revenue, which included the impact of costs associated with Project Concrete and other one-time items totaling
$3.9 million
.
|
•
|
Shack-level operating profit*, a non-GAAP measure,
increase
d
22.3%
to
$112.9 million
, or
25.3%
of Shack sales.
|
•
|
Net income was
$21.9 million
and net income attributable to Shake Shack Inc. was
$15.2 million
, or
$0.52
per diluted share.
|
•
|
Adjusted EBITDA*, a non-GAAP measure,
increase
d
14.2%
to
$73.9 million
.
|
•
|
Adjusted pro forma net
income
*, a non-GAAP measure,
increase
d
28.0%
to
$26.9 million
, or
$0.71
per fully exchanged and diluted share.
|
•
|
49
net system-wide Shack openings, including
34
domestic company-operated Shacks and
15
net licensed Shacks, representing a
30.8%
net increase in system-wide Shack count.
|
|
•
|
We expect the high labor cost trends to continue into fiscal 2019, as we have seen for the last couple of years. We believe that rising minimum wage legislation will continue to affect the restaurant industry, with significant mandatory increases in both minimum wages and salaries in many of our key markets, higher wages overall as a result of a competitive and
|
•
|
Additionally, in regards to food and paper costs, we expect increased usage and cost of paper and packaging as our digital sales continue to represent a higher proportion of our business, as well as broader inflation in transport and distribution costs.
|
•
|
And lastly, in regards to
the adoption of
ASC 842 Leases
in fiscal 2019, we expect to see an impact relating to leases that were classified as operating leases under previous GAAP will be recognized as lease assets and liabilities. See “—Critical Accounting Policies and Estimates” and Note 2 to the consolidated financial statements for more information.
|
|
|
Current Outlook
|
Total revenue (inclusive of licensing revenue)
|
$570 million to $576 million
|
Licensing revenue
|
$15 million to $16 million
|
Same-Shack sales growth (%)
(1)
|
0% to 1% increase
|
Domestic company-operated Shack openings
|
36 to 40
|
Licensed Shack openings, net
|
16 to 18
|
Average annual sales volume for domestic company-operated Shacks
|
$4.0 to $4.1 million
|
Shack-level operating profit margin (%)
(2)
|
23.0% to 24.0%
|
Total general and administrative expenses
|
$66.4 million to $68.2 million
|
Core general and administrative expenses
|
$56 million to $57 million
|
Equity-based compensation
|
$7.4 million to $7.7 million
|
One-time costs related to Project Concrete
|
$3.0 million to $3.5 million
|
Project Concrete capital spend
|
approximately $4 million
|
Depreciation expense
|
$41 million to $42 million
|
Pre-opening costs
|
$13 million to $14 million
|
Interest expense
|
$0.3 million to $0.4 million
|
Adjusted pro forma effective tax rate (%)
|
26.5% to 27.5%
|
(1)
|
Includes approximately 1.5% of menu price increases taken in December 2018.
|
(2)
|
Includes approximately 50 bps of impact from the adoption of the new lease accounting standard.
|
|
|
Target
|
Total revenue (inclusive of licensing revenue)
|
Over $700 million
|
Domestic company-operated Shack openings
|
At least 200
|
Licensed Shack openings, net
|
At least 120
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||||||||
Shack sales
|
$
|
445,589
|
|
97.0
|
%
|
|
$
|
346,388
|
|
96.5
|
%
|
|
$
|
259,350
|
|
96.6
|
%
|
||
Licensing revenue
|
13,721
|
|
3.0
|
%
|
|
12,422
|
|
3.5
|
%
|
|
9,125
|
|
3.4
|
%
|
|||||
TOTAL REVENUE
|
459,310
|
|
100.0
|
%
|
|
358,810
|
|
100.0
|
%
|
|
268,475
|
|
100.0
|
%
|
|||||
Shack-level operating expenses
(1)
:
|
|
|
|
|
|
|
|
|
|||||||||||
|
Food and paper costs
|
126,096
|
|
28.3
|
%
|
|
98,337
|
|
28.4
|
%
|
|
73,752
|
|
28.4
|
%
|
||||
|
Labor and related expenses
|
122,094
|
|
27.4
|
%
|
|
91,740
|
|
26.5
|
%
|
|
65,540
|
|
25.3
|
%
|
||||
|
Other operating expenses
|
51,783
|
|
11.6
|
%
|
|
35,805
|
|
10.3
|
%
|
|
24,946
|
|
9.6
|
%
|
||||
|
Occupancy and related expenses
|
32,710
|
|
7.3
|
%
|
|
28,197
|
|
8.1
|
%
|
|
21,820
|
|
8.4
|
%
|
||||
General and administrative expenses
|
52,720
|
|
11.5
|
%
|
|
39,003
|
|
10.9
|
%
|
|
30,556
|
|
11.4
|
%
|
|||||
Depreciation expense
|
29,000
|
|
6.3
|
%
|
|
21,704
|
|
6.0
|
%
|
|
14,502
|
|
5.4
|
%
|
|||||
Pre-opening costs
|
12,279
|
|
2.7
|
%
|
|
9,603
|
|
2.7
|
%
|
|
9,520
|
|
3.5
|
%
|
|||||
Loss on disposal of property and equipment
|
917
|
|
0.2
|
%
|
|
608
|
|
0.2
|
%
|
|
34
|
|
—
|
%
|
|||||
TOTAL EXPENSES
|
427,599
|
|
93.1
|
%
|
|
324,997
|
|
90.6
|
%
|
|
240,670
|
|
89.6
|
%
|
|||||
OPERATING INCOME
|
31,711
|
|
6.9
|
%
|
|
33,813
|
|
9.4
|
%
|
|
27,805
|
|
10.4
|
%
|
|||||
Other income, net
|
1,514
|
|
0.3
|
%
|
|
128,123
|
|
35.7
|
%
|
|
1,065
|
|
0.4
|
%
|
|||||
Interest expense
|
(2,415
|
)
|
(0.5
|
)%
|
|
(1,643
|
)
|
(0.5
|
)%
|
|
(374
|
)
|
(0.1
|
)%
|
|||||
INCOME BEFORE INCOME TAXES
|
30,810
|
|
6.7
|
%
|
|
160,293
|
|
44.7
|
%
|
|
28,496
|
|
10.6
|
%
|
|||||
Income tax expense
|
8,862
|
|
1.9
|
%
|
|
151,409
|
|
42.2
|
%
|
|
6,350
|
|
2.4
|
%
|
|||||
NET INCOME
|
21,948
|
|
4.8
|
%
|
|
8,884
|
|
2.5
|
%
|
|
22,146
|
|
8.2
|
%
|
|||||
Less: net income attributable to non-controlling interests
|
6,769
|
|
1.5
|
%
|
|
9,204
|
|
2.6
|
%
|
|
9,700
|
|
3.6
|
%
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
|
$
|
15,179
|
|
3.3
|
%
|
|
$
|
(320
|
)
|
(0.1
|
)%
|
|
$
|
12,446
|
|
4.6
|
%
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Shack sales
|
$
|
445,589
|
|
|
$
|
346,388
|
|
|
$
|
259,350
|
|
||
|
Percentage of total revenue
|
97.0
|
%
|
|
96.5
|
%
|
|
96.6
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
99,201
|
|
|
$
|
87,038
|
|
|
|
|||
|
Percentage change compared to prior year
|
28.6
|
%
|
|
33.6
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Licensing revenue
|
$
|
13,721
|
|
|
$
|
12,422
|
|
|
$
|
9,125
|
|
||
|
Percentage of total revenue
|
3.0
|
%
|
|
3.5
|
%
|
|
3.4
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
1,299
|
|
|
$
|
3,297
|
|
|
|
|||
|
Percentage change compared to prior year
|
10.5
|
%
|
|
36.1
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Food and paper costs
|
$
|
126,096
|
|
|
$
|
98,337
|
|
|
$
|
73,752
|
|
||
|
Percentage of Shack sales
|
28.3
|
%
|
|
28.4
|
%
|
|
28.4
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
27,759
|
|
|
$
|
24,585
|
|
|
|
|||
|
Percentage change compared to prior year
|
28.2
|
%
|
|
33.3
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Labor and related expenses
|
$
|
122,094
|
|
|
$
|
91,740
|
|
|
$
|
65,540
|
|
||
|
Percentage of Shack sales
|
27.4
|
%
|
|
26.5
|
%
|
|
25.3
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
30,354
|
|
|
$
|
26,200
|
|
|
|
|||
|
Percentage change compared to prior year
|
33.1
|
%
|
|
40.0
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Other operating expenses
|
$
|
51,783
|
|
|
$
|
35,805
|
|
|
$
|
24,946
|
|
||
|
Percentage of Shack sales
|
11.6
|
%
|
|
10.3
|
%
|
|
9.6
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
15,978
|
|
|
$
|
10,859
|
|
|
|
|||
|
Percentage change compared to prior year
|
44.6
|
%
|
|
43.5
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Occupancy and related expenses
|
$
|
32,710
|
|
|
$
|
28,197
|
|
|
$
|
21,820
|
|
||
|
Percentage of Shack sales
|
7.3
|
%
|
|
8.1
|
%
|
|
8.4
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
4,513
|
|
|
$
|
6,377
|
|
|
|
|||
|
Percentage change compared to prior year
|
16.0
|
%
|
|
29.2
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
General and administrative expenses
|
52,720
|
|
|
$
|
39,003
|
|
|
$
|
30,556
|
|
|||
|
Percentage of total revenue
|
11.5
|
%
|
|
10.9
|
%
|
|
11.4
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
13,717
|
|
|
$
|
8,447
|
|
|
|
|||
|
Percentage change compared to prior year
|
35.2
|
%
|
|
27.6
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Depreciation expense
|
$
|
29,000
|
|
|
$
|
21,704
|
|
|
$
|
14,502
|
|
||
|
Percentage of total revenue
|
6.3
|
%
|
|
6.0
|
%
|
|
5.4
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
7,296
|
|
|
$
|
7,202
|
|
|
|
|||
|
Percentage change compared to prior year
|
33.6
|
%
|
|
49.7
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Pre-opening costs
|
$
|
12,279
|
|
|
$
|
9,603
|
|
|
$
|
9,520
|
|
||
|
Percentage of total revenue
|
2.7
|
%
|
|
2.7
|
%
|
|
3.5
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
2,676
|
|
|
$
|
83
|
|
|
|
|||
|
Percentage change compared to prior year
|
27.9
|
%
|
|
0.9
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Loss on disposal of property and equipment
|
$
|
917
|
|
|
$
|
608
|
|
|
$
|
34
|
|
||
|
Percentage of total revenue
|
0.2
|
%
|
|
0.2
|
%
|
|
—
|
%
|
||||
|
Dollar change compared to prior year
|
$
|
309
|
|
|
$
|
574
|
|
|
|
|||
|
Percentage change compared to prior year
|
50.8
|
%
|
|
1,688.2
|
%
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||
Interest expense
|
$
|
(2,415
|
)
|
|
$
|
(1,643
|
)
|
|
$
|
(374
|
)
|
||
|
Percentage of total revenue
|
(0.5
|
)%
|
|
(0.5
|
)%
|
|
(0.1
|
)%
|
||||
|
Dollar change compared to prior year
|
$
|
(772
|
)
|
|
$
|
(1,269
|
)
|
|
|
|||
|
Percentage change compared to prior year
|
47.0
|
%
|
|
339.3
|
%
|
|
|
|
(dollar amounts in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
(2)
|
|
|||||||
Operating income
|
$
|
31,711
|
|
|
$
|
33,813
|
|
|
$
|
27,805
|
|
|
$
|
6,753
|
|
|
$
|
3,143
|
|
||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Licensing revenue
|
13,721
|
|
|
12,422
|
|
|
9,125
|
|
|
7,373
|
|
|
6,488
|
|
||||||
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
General and administrative expenses
|
52,720
|
|
|
39,003
|
|
|
30,556
|
|
|
37,825
|
|
|
18,187
|
|
||||||
|
Depreciation expense
|
29,000
|
|
|
21,704
|
|
|
14,502
|
|
|
10,222
|
|
|
5,809
|
|
||||||
|
Pre-opening costs
|
12,279
|
|
|
9,603
|
|
|
9,520
|
|
|
5,430
|
|
|
6,105
|
|
||||||
|
Loss on disposal of property and equipment
|
917
|
|
|
608
|
|
|
34
|
|
|
17
|
|
|
105
|
|
||||||
Shack-level operating profit
|
$
|
112,906
|
|
|
$
|
92,309
|
|
|
$
|
73,292
|
|
|
$
|
52,874
|
|
|
$
|
26,861
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total revenue
|
$
|
459,310
|
|
|
$
|
358,810
|
|
|
$
|
268,475
|
|
|
$
|
190,592
|
|
|
$
|
118,530
|
|
||
Less: Licensing revenue
|
13,721
|
|
|
12,422
|
|
|
9,125
|
|
|
7,373
|
|
|
6,488
|
|
|||||||
Shack sales
|
$
|
445,589
|
|
|
$
|
346,388
|
|
|
$
|
259,350
|
|
|
$
|
183,219
|
|
|
$
|
112,042
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shack-level operating profit margin
(1)
|
25.3
|
%
|
|
26.6
|
%
|
|
28.3
|
%
|
|
28.9
|
%
|
|
24.0
|
%
|
(1)
|
As a percentage of Shack sales.
|
(2)
|
We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year.
Fiscal 2018, 2017, 2016 and 2015 each contained 52 weeks.
Fiscal 2014 was a 53-week year.
|
(in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
(2)
|
|
|||||||
Net income
|
$
|
21,948
|
|
|
$
|
8,884
|
|
|
$
|
22,146
|
|
|
$
|
3,124
|
|
|
$
|
2,118
|
|
||
Depreciation expense
|
29,000
|
|
|
21,704
|
|
|
14,502
|
|
|
10,222
|
|
|
5,809
|
|
|||||||
Interest expense, net
|
2,407
|
|
|
1,565
|
|
|
285
|
|
|
325
|
|
|
363
|
|
|||||||
Income tax expense
|
8,862
|
|
|
151,409
|
|
|
6,350
|
|
|
3,304
|
|
|
662
|
|
|||||||
EBITDA
|
62,217
|
|
|
183,562
|
|
|
43,283
|
|
|
16,975
|
|
|
8,952
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity-based compensation
|
6,067
|
|
|
5,623
|
|
|
5,354
|
|
|
4,314
|
|
|
165
|
|
|||||||
Deferred rent
|
876
|
|
|
983
|
|
|
2,251
|
|
|
1,482
|
|
|
2,830
|
|
|||||||
Loss on disposal of property and equipment
|
917
|
|
|
608
|
|
|
34
|
|
|
17
|
|
|
105
|
|
|||||||
Non-recurring compensation expenses related to the IPO
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
12,818
|
|
|
—
|
|
|||||||
IPO-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
635
|
|
|
2,675
|
|
|||||||
Legal settlement
|
1,200
|
|
|
—
|
|
|
—
|
|
|
770
|
|
|
—
|
|
|||||||
Executive transition costs
(4)
|
340
|
|
|
664
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Project Concrete
(5)
|
1,292
|
|
|
181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Costs related to relocation of Home Office
(6)
|
1,019
|
|
|
264
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other income related to adjustment of liabilities under tax receivable agreement
|
(78
|
)
|
|
(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
|
|
|||||||
ADJUSTED EBITDA
|
$
|
73,850
|
|
|
$
|
64,664
|
|
|
$
|
50,234
|
|
|
$
|
37,011
|
|
|
$
|
14,862
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA margin
(1)
|
16.1
|
%
|
|
18.0
|
%
|
|
18.7
|
%
|
|
12.5
|
%
|
|
15.4
|
%
|
(1)
|
As a percentage of total revenue.
|
(2)
|
We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year. Fiscal 2018, 2017, 2016 and 2015 each contained 52 weeks. Fiscal 2014 was a 53-week year.
|
(3)
|
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.
|
(4)
|
Represents fees paid in connection with the search for certain of our executive and key management positions, non-recurring signing bonuses and other transition costs, including related equity-based compensation.
|
(5)
|
Represents consulting and advisory fees related to our enterprise-wide 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 2018, 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.
|
(4)
|
Represents fees paid in connection with the search for certain of our executive and key management positions, non-recurring signing bonuses and other transition costs, including related equity-based compensation.
|
(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 relocation to a new Home Office, including duplicative non-cash deferred rent and legal costs.
|
(7)
|
For fiscal 2018, 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
22.2%
,
38.5%
and
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)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Net cash provided by operating activities
|
$
|
85,395
|
|
|
$
|
70,878
|
|
|
$
|
54,285
|
|
Net cash used in investing activities
|
(86,604
|
)
|
|
(61,943
|
)
|
|
(114,761
|
)
|
|||
Net cash provided by financing activities
|
4,452
|
|
|
965
|
|
|
1,234
|
|
|||
Increase (decrease) in cash and cash equivalents
|
3,243
|
|
|
9,900
|
|
|
(59,242
|
)
|
|||
Cash and cash equivalents at beginning of period
|
21,507
|
|
|
11,607
|
|
|
70,849
|
|
|||
Cash and cash equivalents at end of period
|
$
|
24,750
|
|
|
$
|
21,507
|
|
|
$
|
11,607
|
|
|
(in thousands)
|
Total
|
|
|
Less than
1 Year
|
|
|
1-3
Years
|
|
|
3-5
Years
|
|
|
More Than
5 Years
|
|
|||||
Operating lease obligations
(1)
|
$
|
339,634
|
|
|
$
|
31,785
|
|
|
$
|
66,182
|
|
|
$
|
67,522
|
|
|
$
|
174,145
|
|
Deemed landlord financing obligations
(1)
|
46,691
|
|
|
4,487
|
|
|
9,571
|
|
|
9,974
|
|
|
22,659
|
|
|||||
Liabilities under tax receivable agreement
(2)
|
203,712
|
|
|
5,804
|
|
|
21,885
|
|
|
22,766
|
|
|
153,257
|
|
|||||
Purchase obligations
|
158,020
|
|
|
52,652
|
|
|
27,693
|
|
|
23,362
|
|
|
54,313
|
|
|||||
TOTAL
|
$
|
748,057
|
|
|
$
|
94,728
|
|
|
$
|
125,331
|
|
|
$
|
123,624
|
|
|
$
|
404,374
|
|
(1)
|
See
Note 10 to the consolidated financial statements included in Item 8 for further discussion of our leases and deemed landlord financing.
|
(2)
|
See Notes 15 and 18 to the consolidated financial statements included in Item 8 for further discussion of our Tax Receivable Agreement and related liabilities.
|
|
|
|
|
|
|
|
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 26
2018 |
|
|
December 27
2017 |
|
||
ASSETS
|
|
|
|
||||||
Current assets:
|
|
|
|
||||||
|
Cash and cash equivalents
|
$
|
24,750
|
|
|
$
|
21,507
|
|
|
|
Marketable securities
|
62,113
|
|
|
63,036
|
|
|||
|
Accounts receivable
|
10,523
|
|
|
5,641
|
|
|||
|
Inventories
|
1,749
|
|
|
1,258
|
|
|||
|
Prepaid expenses and other current assets
|
1,984
|
|
|
1,757
|
|
|||
|
Total current assets
|
101,119
|
|
|
93,199
|
|
|||
Property and equipment, net
|
261,854
|
|
|
187,095
|
|
||||
Deferred income taxes, net
|
242,533
|
|
|
185,914
|
|
||||
Other assets
|
5,026
|
|
|
4,398
|
|
||||
TOTAL ASSETS
|
$
|
610,532
|
|
|
$
|
470,606
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||||
Current liabilities:
|
|
|
|
||||||
|
Accounts payable
|
$
|
12,467
|
|
|
$
|
8,210
|
|
|
|
Accrued expenses
|
22,799
|
|
|
11,649
|
|
|||
|
Accrued wages and related liabilities
|
10,652
|
|
|
6,228
|
|
|||
|
Other current liabilities
|
14,030
|
|
|
7,937
|
|
|||
|
Total current liabilities
|
59,948
|
|
|
34,024
|
|
|||
Deemed landlord financing
|
20,846
|
|
|
14,518
|
|
||||
Deferred rent
|
47,864
|
|
|
36,596
|
|
||||
Liabilities under tax receivable agreement, net of current portion
|
197,921
|
|
|
158,436
|
|
||||
Other long-term liabilities
|
10,498
|
|
|
2,553
|
|
||||
Total liabilities
|
337,077
|
|
|
246,127
|
|
||||
Commitments and contingencies
|
|
|
|
||||||
Stockholders' equity:
|
|
|
|
||||||
|
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 26, 2018 and December 27, 2017, respectively.
|
—
|
|
|
—
|
|
|||
|
Class A common stock, $0.001 par value—200,000,000 shares authorized; 29,520,833 and 26,527,477 shares issued and outstanding as of December 26, 2018 and December 27, 2017, respectively.
|
30
|
|
|
27
|
|
|||
|
Class B common stock, $0.001 par value—35,000,000 shares authorized; 7,557,347 and 10,250,007 shares issued and outstanding as of December 26, 2018 and December 27, 2017, respectively.
|
8
|
|
|
10
|
|
|||
|
Additional paid-in capital
|
195,633
|
|
|
153,105
|
|
|||
|
Retained earnings
|
30,404
|
|
|
16,399
|
|
|||
|
Accumulated other comprehensive loss
|
—
|
|
|
(49
|
)
|
|||
|
Total stockholders' equity attributable to Shake Shack Inc.
|
226,075
|
|
|
169,492
|
|
|||
Non-controlling interests
|
47,380
|
|
|
54,987
|
|
||||
Total equity
|
273,455
|
|
|
224,479
|
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
610,532
|
|
|
$
|
470,606
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|||
Shack sales
|
$
|
445,589
|
|
|
$
|
346,388
|
|
|
$
|
259,350
|
|
||
Licensing revenue
|
13,721
|
|
|
12,422
|
|
|
9,125
|
|
|||||
TOTAL REVENUE
|
459,310
|
|
|
358,810
|
|
|
268,475
|
|
|||||
Shack-level operating expenses:
|
|
|
|
|
|
||||||||
|
Food and paper costs
|
126,096
|
|
|
98,337
|
|
|
73,752
|
|
||||
|
Labor and related expenses
|
122,094
|
|
|
91,740
|
|
|
65,540
|
|
||||
|
Other operating expenses
|
51,783
|
|
|
35,805
|
|
|
24,946
|
|
||||
|
Occupancy and related expenses
|
32,710
|
|
|
28,197
|
|
|
21,820
|
|
||||
General and administrative expenses
|
52,720
|
|
|
39,003
|
|
|
30,556
|
|
|||||
Depreciation expense
|
29,000
|
|
|
21,704
|
|
|
14,502
|
|
|||||
Pre-opening costs
|
12,279
|
|
|
9,603
|
|
|
9,520
|
|
|||||
Loss on disposal of property and equipment
|
917
|
|
|
608
|
|
|
34
|
|
|||||
TOTAL EXPENSES
|
427,599
|
|
|
324,997
|
|
|
240,670
|
|
|||||
OPERATING INCOME
|
31,711
|
|
|
33,813
|
|
|
27,805
|
|
|||||
Other income, net
|
1,514
|
|
|
128,123
|
|
|
1,065
|
|
|||||
Interest expense
|
(2,415
|
)
|
|
(1,643
|
)
|
|
(374
|
)
|
|||||
INCOME BEFORE INCOME TAXES
|
30,810
|
|
|
160,293
|
|
|
28,496
|
|
|||||
Income tax expense
|
8,862
|
|
|
151,409
|
|
|
6,350
|
|
|||||
NET INCOME
|
21,948
|
|
|
8,884
|
|
|
22,146
|
|
|||||
Less: net income attributable to non-controlling interests
|
6,769
|
|
|
9,204
|
|
|
9,700
|
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
|
$
|
15,179
|
|
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
||
Earnings (loss) per share of Class A common stock:
|
|
|
|
|
|
||||||||
|
Basic
|
$
|
0.54
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.54
|
|
|
|
Diluted
|
$
|
0.52
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.53
|
|
|
Weighted-average shares of Class A common stock outstanding:
|
|
|
|
|
|
||||||||
|
Basic
|
28,299
|
|
|
25,876
|
|
|
22,956
|
|
||||
|
Diluted
|
29,179
|
|
|
25,876
|
|
|
23,449
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|||
Net income
|
$
|
21,948
|
|
|
$
|
8,884
|
|
|
$
|
22,146
|
|
||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||||
|
Available-for-sale securities
(1)
:
|
|
|
|
|
|
|||||||
|
|
Change in net unrealized holding losses
|
(3
|
)
|
|
(94
|
)
|
|
(35
|
)
|
|||
|
|
Less: reclassification adjustments for net realized losses included in net income
|
16
|
|
|
47
|
|
|
19
|
|
|||
|
|
Net change
|
13
|
|
|
(47
|
)
|
|
(16
|
)
|
|||
OTHER COMPREHENSIVE INCOME (LOSS)
|
13
|
|
|
(47
|
)
|
|
(16
|
)
|
|||||
COMPREHENSIVE INCOME
|
21,961
|
|
|
8,837
|
|
|
22,130
|
|
|||||
Less: comprehensive income attributable to non-controlling interests
|
6,772
|
|
|
9,191
|
|
|
9,694
|
|
|||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
|
$
|
15,189
|
|
|
$
|
(354
|
)
|
|
$
|
12,436
|
|
|
|
Class A
Common Stock
|
|
|
Class B
Common Stock
|
|
|
Additional
Paid-In
Capital
|
|
|
Retained Earnings
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
Non-
Controlling
Interest
|
|
|
Total
Equity
|
|
|||||||||||||
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||
BALANCE, DECEMBER 30, 2015
|
19,789,259
|
|
|
$
|
20
|
|
|
16,460,741
|
|
|
$
|
16
|
|
|
$
|
96,311
|
|
|
$
|
4,273
|
|
|
$
|
(5
|
)
|
|
$
|
56,404
|
|
|
$
|
157,019
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|||||||
Cumulative effect of accounting changes
|
|
|
|
|
|
|
|
|
|
|
(1,174
|
)
|
|
39
|
|
|
(439
|
)
|
|
(1,574
|
)
|
||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
15,179
|
|
|
|
|
6,769
|
|
|
21,948
|
|
|||||||||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net change related to available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
3
|
|
|
13
|
|
|||||||||||||
Equity-based compensation
|
|
|
|
|
|
|
|
|
6,250
|
|
|
|
|
|
|
|
|
6,250
|
|
||||||||||||||
Activity under stock compensation plans
|
300,696
|
|
|
1
|
|
|
|
|
|
|
2,509
|
|
|
|
|
|
|
2,013
|
|
|
4,523
|
|
|||||||||||
Redemption of LLC Interests
|
2,692,660
|
|
|
2
|
|
|
(2,692,660
|
)
|
|
(2
|
)
|
|
15,202
|
|
|
|
|
|
|
(15,202
|
)
|
|
—
|
|
|||||||||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
|
|
|
|
|
|
|
|
|
18,567
|
|
|
|
|
|
|
|
|
18,567
|
|
||||||||||||||
Distributions paid to non-controlling interest holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(751
|
)
|
|
(751
|
)
|
||||||||||||||
BALANCE, DECEMBER 26, 2018
|
29,520,833
|
|
|
$
|
30
|
|
|
7,557,347
|
|
|
$
|
8
|
|
|
$
|
195,633
|
|
|
$
|
30,404
|
|
|
$
|
—
|
|
|
$
|
47,380
|
|
|
$
|
273,455
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|||
OPERATING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Net income (including amounts attributable to non-controlling interests)
|
$
|
21,948
|
|
|
$
|
8,884
|
|
|
$
|
22,146
|
|
|||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||||||||||
|
Depreciation expense
|
29,000
|
|
|
21,704
|
|
|
14,502
|
|
|||||||
|
Equity-based compensation
|
6,143
|
|
|
5,623
|
|
|
5,354
|
|
|||||||
|
Deferred income taxes
|
788
|
|
|
146,334
|
|
|
(523
|
)
|
|||||||
|
Non-cash interest expense
|
72
|
|
|
317
|
|
|
304
|
|
|||||||
|
Excess tax benefits on equity-based compensation
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||||||
|
Loss on sale of marketable securities
|
16
|
|
|
5
|
|
|
18
|
|
|||||||
|
Loss on disposal of property and equipment
|
917
|
|
|
608
|
|
|
34
|
|
|||||||
|
Other non-cash expense (income)
|
(78
|
)
|
|
(127,221
|
)
|
|
(688
|
)
|
|||||||
|
Net loss on sublease
|
672
|
|
|
—
|
|
|
—
|
|
|||||||
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||||||
|
|
Accounts receivable
|
5,530
|
|
|
6,421
|
|
|
2,974
|
|
||||||
|
|
Inventories
|
(491
|
)
|
|
(452
|
)
|
|
(263
|
)
|
||||||
|
|
Prepaid expenses and other current assets
|
(270
|
)
|
|
2,244
|
|
|
(756
|
)
|
||||||
|
|
Other assets
|
(2,726
|
)
|
|
(446
|
)
|
|
(822
|
)
|
||||||
|
|
Accounts payable
|
3,156
|
|
|
1,235
|
|
|
839
|
|
||||||
|
|
Accrued expenses
|
7,979
|
|
|
4,388
|
|
|
5,560
|
|
||||||
|
|
Accrued wages and related liabilities
|
4,424
|
|
|
144
|
|
|
280
|
|
||||||
|
|
Other current liabilities
|
860
|
|
|
(988
|
)
|
|
2,130
|
|
||||||
|
|
Deferred rent
|
1,247
|
|
|
1,008
|
|
|
3,415
|
|
||||||
|
|
Other long-term liabilities
|
6,208
|
|
|
1,070
|
|
|
(186
|
)
|
||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
85,395
|
|
|
70,878
|
|
|
54,285
|
|
||||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
(87,525
|
)
|
|
(61,533
|
)
|
|
(54,433
|
)
|
||||||||
Purchases of marketable securities
|
(1,223
|
)
|
|
(7,861
|
)
|
|
(61,266
|
)
|
||||||||
Sales of marketable securities
|
2,144
|
|
|
7,451
|
|
|
938
|
|
||||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(86,604
|
)
|
|
(61,943
|
)
|
|
(114,761
|
)
|
||||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Payments on promissory note
|
—
|
|
|
—
|
|
|
(313
|
)
|
||||||||
Proceeds from deemed landlord financing
|
1,382
|
|
|
1,183
|
|
|
65
|
|
||||||||
Payments on deemed landlord financing
|
(702
|
)
|
|
(266
|
)
|
|
—
|
|
||||||||
Distributions paid to non-controlling interest holders
|
(751
|
)
|
|
(2,379
|
)
|
|
(1,745
|
)
|
||||||||
Payments under tax receivable agreement
|
—
|
|
|
(4,844
|
)
|
|
—
|
|
||||||||
Proceeds from stock option exercises
|
5,472
|
|
|
7,585
|
|
|
3,194
|
|
||||||||
Employee withholding taxes related to net settled equity awards
|
(949
|
)
|
|
(314
|
)
|
|
—
|
|
||||||||
Excess tax benefits from equity-based compensation
|
—
|
|
|
—
|
|
|
33
|
|
||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
4,452
|
|
|
965
|
|
|
1,234
|
|
||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
3,243
|
|
|
9,900
|
|
|
(59,242
|
)
|
||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
21,507
|
|
|
11,607
|
|
|
70,849
|
|
||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
24,750
|
|
|
$
|
21,507
|
|
|
$
|
11,607
|
|
|
|
|
Page
|
|
|
▪
|
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
|
|
|
As reported under ASC 606
|
|
|
If reported under ASC 605
|
|
|
Increase (decrease)
|
|
|||
Shack sales
|
$
|
445,589
|
|
|
$
|
445,589
|
|
|
$
|
—
|
|
Licensing revenue
|
13,721
|
|
|
14,389
|
|
|
(668
|
)
|
|||
Total revenue
|
$
|
459,310
|
|
|
$
|
459,978
|
|
|
$
|
(668
|
)
|
|
December 26
2018 |
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|||
Shack sales
|
$
|
445,589
|
|
|
$
|
346,388
|
|
|
$
|
259,350
|
|
Licensing revenue:
|
|
|
|
|
|
||||||
Sales-based royalties
|
13,422
|
|
|
11,633
|
|
|
8,765
|
|
|||
Initial territory and opening fees
|
299
|
|
|
789
|
|
|
360
|
|
|||
Total revenue
|
$
|
459,310
|
|
|
$
|
358,810
|
|
|
$
|
268,475
|
|
|
||||||||
|
December 26
2018 |
|
|
December 28
2017 |
|
|||
Shack sales receivables
|
$
|
2,550
|
|
|
$
|
2,184
|
|
|
Licensing receivables
|
2,616
|
|
|
1,522
|
|
|||
Gift card liability
|
1,796
|
|
|
1,472
|
|
|||
Deferred revenue, current
|
307
|
|
|
265
|
|
|||
Deferred revenue, long-term
|
10,026
|
|
|
3,742
|
|
|
|
|
December 26, 2018
|
|
|||||||||||||||||||||
|
Cost Basis
|
|
|
Gross Unrealized Gains
|
|
|
Gross Unrealized Losses
|
|
|
Fair Value
|
|
|
Cash and Cash Equivalents
|
|
|
Marketable Securities
|
|
|||||||
Cash
|
$
|
19,746
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,746
|
|
|
$
|
19,746
|
|
|
$
|
—
|
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Money market funds
|
5,004
|
|
|
—
|
|
|
—
|
|
|
5,004
|
|
|
5,004
|
|
|
—
|
|
||||||
|
Mutual funds
|
62,235
|
|
|
—
|
|
|
(122
|
)
|
|
62,113
|
|
|
—
|
|
|
62,113
|
|
||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Corporate debt securities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
86,985
|
|
|
$
|
—
|
|
|
$
|
(122
|
)
|
|
$
|
86,863
|
|
|
$
|
24,750
|
|
|
$
|
62,113
|
|
|
|
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
|
)
|
|
60,924
|
|
|
—
|
|
|
60,924
|
|
||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Corporate debt securities
(1)
|
2,125
|
|
|
2
|
|
|
(15
|
)
|
|
2,112
|
|
|
—
|
|
|
2,112
|
|
||||||
Total
|
$
|
84,617
|
|
|
$
|
2
|
|
|
$
|
(76
|
)
|
|
$
|
84,543
|
|
|
$
|
21,507
|
|
|
$
|
63,036
|
|
(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.
|
|
|
|
||||||||||||||||
|
|
Less than 12 Months
|
|
|
12 Months or Greater
|
|
|
Total
|
|
|||||||||
|
Fair Value
|
|
|
Unrealized Loss
|
|
|
Fair Value
|
|
|
Unrealized Loss
|
|
|
Fair Value
|
|
|
Unrealized Loss
|
|
|
|
As of December 26, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
As of December 27, 2017
|
1,675
|
|
|
(12
|
)
|
|
162
|
|
|
(3
|
)
|
|
1,837
|
|
|
(15
|
)
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|||||||
|
Dividend income
|
$
|
1,392
|
|
|
$
|
830
|
|
|
$
|
296
|
|
|
Interest income
|
9
|
|
|
77
|
|
|
88
|
|
|||
|
Loss on investments
|
(3
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|||
|
Unrealized loss on available-for-sale equity securities
|
(61
|
)
|
|
—
|
|
|
—
|
|
|||
Total other income, net
|
$
|
1,337
|
|
|
$
|
902
|
|
|
$
|
377
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|||||||
|
Gross proceeds from sales and redemptions
|
$
|
2,144
|
|
|
$
|
2,223
|
|
|
$
|
938
|
|
|
Cost basis of sales and redemptions
|
2,160
|
|
|
2,271
|
|
|
956
|
|
|||
|
Gross realized gains included in net income
|
2
|
|
|
1
|
|
|
2
|
|
|||
|
Gross realized losses included in net income
|
(18
|
)
|
|
(49
|
)
|
|
(20
|
)
|
|||
|
Amounts reclassified out of accumulated other comprehensive loss
|
16
|
|
|
47
|
|
|
19
|
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
||
Landlord receivables
|
$
|
4,494
|
|
|
$
|
1,660
|
|
Licensing receivables
|
2,579
|
|
|
1,422
|
|
||
Credit card receivables
|
2,446
|
|
|
2,018
|
|
||
Other receivables
|
1,004
|
|
|
541
|
|
||
Accounts receivable
|
$
|
10,523
|
|
|
$
|
5,641
|
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
||
Food
|
$
|
1,291
|
|
|
$
|
874
|
|
Wine
|
83
|
|
|
69
|
|
||
Beer
|
95
|
|
|
85
|
|
||
Beverages
|
203
|
|
|
111
|
|
||
Retail merchandise
|
77
|
|
|
119
|
|
||
Inventories
|
$
|
1,749
|
|
|
$
|
1,258
|
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
||
Leasehold improvements
|
$
|
228,453
|
|
|
$
|
166,963
|
|
Landlord funded assets
|
15,595
|
|
|
7,472
|
|
||
Equipment
|
40,716
|
|
|
31,608
|
|
||
Furniture and fixtures
|
14,055
|
|
|
10,128
|
|
||
Computer equipment and software
|
19,008
|
|
|
12,721
|
|
||
Construction in progress (includes assets under construction from deemed landlord financing)
|
29,474
|
|
|
16,458
|
|
||
Property and equipment, gross
|
347,301
|
|
|
245,350
|
|
||
Less: accumulated depreciation
|
(85,447
|
)
|
|
(58,255
|
)
|
||
Property and equipment, net
|
$
|
261,854
|
|
|
$
|
187,095
|
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
||
Sales tax payable
|
$
|
3,143
|
|
|
$
|
1,813
|
|
Current portion of liabilities under tax receivable agreement
|
5,804
|
|
|
937
|
|
||
Gift card liability
|
1,796
|
|
|
1,472
|
|
||
Other
|
3,287
|
|
|
3,715
|
|
||
Other current liabilities
|
$
|
14,030
|
|
|
$
|
7,937
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Minimum rent
|
$
|
24,920
|
|
|
$
|
20,421
|
|
|
$
|
15,408
|
|
|
Deferred rent
|
1,241
|
|
|
838
|
|
|
2,122
|
|
||||
Contingent rent
|
4,805
|
|
|
4,902
|
|
|
4,294
|
|
||||
Total rent expense
|
$
|
30,966
|
|
|
$
|
26,161
|
|
|
$
|
21,824
|
|
|
Operating
Leases
|
|
|
Deemed Landlord Financing
(1)
|
|
||
2019
|
$
|
31,785
|
|
|
$
|
4,487
|
|
2020
|
32,819
|
|
|
4,755
|
|
||
2021
|
33,363
|
|
|
4,816
|
|
||
2022
|
33,934
|
|
|
4,889
|
|
||
2023
|
33,588
|
|
|
5,085
|
|
||
Thereafter
|
174,145
|
|
|
22,659
|
|
||
Total minimum lease payments
|
$
|
339,634
|
|
|
$
|
46,691
|
|
(1)
|
Amounts include minimum lease payments for
one
lease under construction as of
December 26, 2018
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.
|
|
|
|
|
2018
|
|
|
2017
|
|
||||||
|
LLC Interests
|
|
|
Ownership %
|
|
|
LLC Interests
|
|
|
Ownership %
|
|
Number of LLC Interests held by Shake Shack Inc.
|
29,520,833
|
|
|
79.6
|
%
|
|
26,527,477
|
|
|
72.1
|
%
|
Number of LLC Interests held by non-controlling interest holders
|
7,557,347
|
|
|
20.4
|
%
|
|
10,250,007
|
|
|
27.9
|
%
|
Total LLC Interests outstanding
|
37,078,180
|
|
|
100.0
|
%
|
|
36,777,484
|
|
|
100.0
|
%
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
||||
Net income (loss) attributable to Shake Shack Inc.
|
$
|
15,179
|
|
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|||||||
|
Unrealized holding gains (losses) on available-for-sale securities
|
10
|
|
|
(34
|
)
|
|
(10
|
)
|
|||
Transfers (to) from non-controlling interests:
|
|
|
|
|
|
|||||||
|
Increase in additional paid-in capital as a result of the redemption of LLC Interests
|
15,202
|
|
|
4,415
|
|
|
16,986
|
|
|||
|
Increase in additional paid-in capital as a result of activity under the stock compensation plan and the related income tax effect
|
2,509
|
|
|
4,451
|
|
|
825
|
|
|||
Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.
|
$
|
32,900
|
|
|
$
|
8,512
|
|
|
$
|
30,247
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Stock options
|
3,039
|
|
|
3,474
|
|
|
4,262
|
|
||||
Performance stock units
|
2,449
|
|
|
1,869
|
|
|
1,092
|
|
||||
Restricted stock units
|
655
|
|
|
280
|
|
|
—
|
|
||||
Equity-based compensation expense
|
$
|
6,143
|
|
|
$
|
5,623
|
|
|
$
|
5,354
|
|
|
|
|
|
|
|
|
|||||||
Total income tax benefit recognized related to equity-based compensation
|
$
|
172
|
|
|
$
|
198
|
|
|
$
|
168
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
General and administrative expenses
|
5,991
|
|
|
5,463
|
|
|
5,260
|
|
|
Labor and related expenses
|
152
|
|
|
160
|
|
|
94
|
|
|
Equity-based compensation expense
|
6,143
|
|
|
5,623
|
|
|
5,354
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
Expected term (years)
(1)
|
7.5
|
|
|
7.5
|
|
|
5.5
|
|
Expected volatility
(2)
|
42.5
|
%
|
|
44.5
|
%
|
|
50.7
|
%
|
Risk-free interest rate
(3)
|
2.8
|
%
|
|
2.1
|
%
|
|
1.5
|
%
|
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 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
|
|
|
|
|
|
|||
|
Granted
|
5,036
|
|
|
39.91
|
|
|
|
|
|
|||
|
Exercised
|
(260,515
|
)
|
|
21.00
|
|
|
|
|
|
|||
|
Forfeited
|
(102,879
|
)
|
|
(21.27
|
)
|
|
|
|
|
|||
|
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding as of December 26, 2018
|
1,360,983
|
|
|
$
|
21.25
|
|
|
$
|
29,881
|
|
|
6.1
|
|
Options vested and exercisable as of December 26, 2018
|
674,247
|
|
|
$
|
21.26
|
|
|
$
|
14,798
|
|
|
6.1
|
|
Options expected to vest as of December 26, 2018
|
686,736
|
|
|
$
|
21.25
|
|
|
$
|
15,083
|
|
|
6.1
|
|
|
Stock
Options
|
|
|
Weighted
Average
Grant-Date Fair Value
|
|
|
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
|
|
|
|
Vested
|
(404,120
|
)
|
|
8.62
|
|
|
|
Granted
|
5,036
|
|
|
19.86
|
|
|
|
Forfeited
|
(90,275
|
)
|
|
8.59
|
|
|
Unvested as of December 26, 2018
|
686,736
|
|
|
$
|
8.74
|
|
|
|
Options Outstanding
|
|
|
Options Exercisable
|
|
|||||||||||||
|
|
Number Outstanding at December 26, 2018
|
|
|
Weighted Average Remaining Contractual Life (Years)
|
|
Weighted Average Exercise Price
|
|
|
Number Exercisable at December 26, 2018
|
|
|
Weighted Average Remaining Contractual Life (Years)
|
|
|
Weighted Average Exercise Price
|
|
||
Exercise Price
|
|
|
|
|
|
|
|||||||||||||
$21.00
|
|
1,339,274
|
|
|
6.1
|
|
$
|
21.00
|
|
|
661,694
|
|
|
6.1
|
|
|
$
|
21.00
|
|
$34.62
|
|
10,415
|
|
|
7.4
|
|
$
|
34.62
|
|
|
10,415
|
|
|
7.4
|
|
|
$
|
34.62
|
|
$36.41
|
|
1,108
|
|
|
7.9
|
|
$
|
36.41
|
|
|
1,108
|
|
|
7.9
|
|
|
$
|
36.41
|
|
$38.91
|
|
5,150
|
|
|
8.5
|
|
$
|
38.91
|
|
|
1,030
|
|
|
8.5
|
|
|
$
|
38.91
|
|
$39.91
|
|
5,036
|
|
|
9.2
|
|
$
|
39.91
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
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
|
|
|
|
Granted
|
60,437
|
|
|
58.46
|
|
|
|
Performance achievement
(1)
|
(12,139
|
)
|
|
37.89
|
|
|
|
Vested
|
(43,861
|
)
|
|
38.13
|
|
|
|
Forfeited
|
(10,737
|
)
|
|
41.28
|
|
|
|
Expired
|
—
|
|
|
—
|
|
|
Outstanding as of December 26, 2018
|
118,542
|
|
|
$
|
48.16
|
|
(1)
|
Represents the incremental awards earned and/or awards forfeited based on the achievement of performance conditions.
|
|
|
Restricted
Stock
Units
|
|
|
Weighted
Average
Grant Date Fair Value
|
|
|
Outstanding as of December 28, 2016
|
—
|
|
|
$
|
—
|
|
|
|
Granted
|
44,476
|
|
|
38.98
|
|
|
|
Vested
|
—
|
|
|
—
|
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
|
Expired
|
—
|
|
|
—
|
|
|
Outstanding as of December 27, 2017
|
44,476
|
|
|
$
|
38.98
|
|
|
|
Granted
|
18,882
|
|
|
49.12
|
|
|
|
Vested
|
(13,635
|
)
|
|
39.13
|
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
|
Expired
|
—
|
|
|
—
|
|
|
Outstanding as of December 26, 2018
|
49,723
|
|
|
$
|
42.79
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Domestic
|
$
|
21,595
|
|
|
$
|
152,204
|
|
|
$
|
20,623
|
|
Foreign
|
9,215
|
|
|
8,089
|
|
|
7,873
|
|
|||
Income before income taxes
|
$
|
30,810
|
|
|
$
|
160,293
|
|
|
$
|
28,496
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Current income taxes:
|
|
|
|
|
|
||||||||
|
Federal
|
$
|
5,281
|
|
|
$
|
518
|
|
|
$
|
3,767
|
|
|
|
State and local
|
858
|
|
|
3,615
|
|
|
2,439
|
|
||||
|
Foreign
|
1,935
|
|
|
942
|
|
|
667
|
|
||||
|
Total current income taxes
|
8,074
|
|
|
5,075
|
|
|
6,873
|
|
||||
Deferred income taxes:
|
|
|
|
|
|
||||||||
|
Federal
|
(210
|
)
|
|
145,139
|
|
|
(48
|
)
|
||||
|
State and local
|
998
|
|
|
1,195
|
|
|
(475
|
)
|
||||
|
Total deferred income taxes
|
788
|
|
|
146,334
|
|
|
(523
|
)
|
||||
Income tax expense
|
$
|
8,862
|
|
|
$
|
151,409
|
|
|
$
|
6,350
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||||||||
Expected U.S. federal income taxes at statutory rate
|
$
|
6,470
|
|
21.0
|
%
|
|
$
|
56,103
|
|
35.0
|
%
|
|
$
|
9,689
|
|
34.0
|
%
|
|
State and local income taxes, net of federal benefit
|
797
|
|
2.6
|
%
|
|
2,590
|
|
1.6
|
%
|
|
1,461
|
|
5.1
|
%
|
||||
Foreign withholding taxes
|
1,935
|
|
6.3
|
%
|
|
942
|
|
0.6
|
%
|
|
667
|
|
2.3
|
%
|
||||
Tax credits
|
(2,151
|
)
|
(7.0
|
)%
|
|
(1,230
|
)
|
(0.8
|
)%
|
|
(779
|
)
|
(2.7
|
)%
|
||||
Non-controlling interest
|
(1,908
|
)
|
(6.2
|
)%
|
|
(3,273
|
)
|
(2.0
|
)%
|
|
(3,765
|
)
|
(13.2
|
)%
|
||||
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
|
3,794
|
|
12.3
|
%
|
|
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
|
(75
|
)
|
(0.2
|
)%
|
|
35
|
|
—
|
%
|
|
430
|
|
1.5
|
%
|
||||
Income tax expense
|
$
|
8,862
|
|
28.8
|
%
|
|
$
|
151,409
|
|
94.5
|
%
|
|
$
|
6,350
|
|
22.3
|
%
|
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
||
Deferred tax assets:
|
|
|
|
||||||
|
Investment in partnership
|
$
|
168,451
|
|
|
$
|
137,449
|
|
|
|
Tax Receivable Agreement
|
57,203
|
|
|
43,464
|
|
|||
|
Deferred rent
|
1,109
|
|
|
571
|
|
|||
|
Deferred revenue
|
184
|
|
|
59
|
|
|||
|
Stock-based compensation
|
375
|
|
|
322
|
|
|||
|
Net operating loss carryforwards
|
18,046
|
|
|
12,332
|
|
|||
|
Tax credits
|
5,194
|
|
|
2,328
|
|
|||
|
Other assets
|
331
|
|
|
176
|
|
|||
|
Total gross deferred tax assets
|
250,893
|
|
|
196,701
|
|
|||
Valuation allowance
|
(6,925
|
)
|
|
(10,114
|
)
|
||||
Total deferred tax assets, net of valuation allowance
|
243,968
|
|
|
186,587
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||||
|
Property and equipment
|
(1,435
|
)
|
|
(673
|
)
|
|||
|
Total gross deferred tax liabilities
|
(1,435
|
)
|
|
(673
|
)
|
|||
Net deferred tax assets
|
$
|
242,533
|
|
|
$
|
185,914
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Numerator:
|
|
|
|
|
|
||||||||
|
Net income
|
$
|
21,948
|
|
|
$
|
8,884
|
|
|
$
|
22,146
|
|
|
|
Less: net income attributable to non-controlling interests
|
6,769
|
|
|
9,204
|
|
|
9,700
|
|
||||
|
Net income (loss) attributable to Shake Shack Inc.
|
$
|
15,179
|
|
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|
Denominator:
|
|
|
|
|
|
||||||||
|
Weighted-average shares of Class A common stock outstanding—basic
|
28,299
|
|
|
25,876
|
|
|
22,956
|
|
||||
|
Effect of dilutive securities:
|
|
|
|
|
|
|||||||
|
|
Stock options
|
798
|
|
|
—
|
|
|
491
|
|
|||
|
|
Performance stock units
|
63
|
|
|
—
|
|
|
2
|
|
|||
|
|
Restricted stock units
|
19
|
|
|
—
|
|
|
—
|
|
|||
|
Weighted-average shares of Class A common stock outstanding—diluted
|
29,179
|
|
|
25,876
|
|
|
23,449
|
|
||||
|
|
|
|
|
|
|
|
||||||
Earnings (loss) per share of Class A common stock—basic
|
$
|
0.54
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.54
|
|
||
Earnings (loss) per share of Class A common stock—diluted
|
$
|
0.52
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.53
|
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Stock options
|
—
|
|
|
|
1,719,341
|
|
(2)
|
|
125
|
|
(1)
|
||
Performance stock units
|
21,560
|
|
(3)
|
|
124,842
|
|
(2)
|
|
26,860
|
|
(3)
|
||
Restricted stock units
|
—
|
|
|
|
44,476
|
|
(2)
|
|
—
|
|
|
||
Shares of Class B common stock
|
7,557,347
|
|
(4)
|
|
10,250,007
|
|
(4)
|
|
11,253,592
|
|
(4)
|
(1)
|
Weighted-average number of securities 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").
|
(2)
|
Represents number of instruments outstanding at the end of the period that were excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive.
|
(3)
|
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.
|
(4)
|
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.
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Cash paid for:
|
|
|
|
|
|
|||||||
|
Income taxes, net of refunds
|
$
|
3,272
|
|
|
$
|
2,261
|
|
|
$
|
1,823
|
|
|
Interest, net of amounts capitalized
|
2,261
|
|
|
1,106
|
|
|
54
|
|
|||
Non-cash investing activities:
|
|
|
|
|
|
|||||||
|
Accrued purchases of property and equipment
|
17,443
|
|
|
7,526
|
|
|
6,150
|
|
|||
|
Capitalized landlord assets for leases where we are deemed the accounting owner
|
5,443
|
|
|
10,125
|
|
|
1,985
|
|
|||
|
Capitalized equity-based compensation
|
107
|
|
|
109
|
|
|
139
|
|
|||
Non-cash financing activities:
|
|
|
|
|
|
|||||||
|
Class A common stock issued in connection with the redemption of LLC Interests
|
2
|
|
|
1
|
|
|
5
|
|
|||
|
Cancellation of Class B common stock in connection with the redemption of LLC Interests
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|||
|
Establishment of liabilities under tax receivable agreement
|
44,338
|
|
|
18,973
|
|
|
100,063
|
|
|||
|
Accrued distributions payable to non-controlling interest holders
|
—
|
|
|
—
|
|
|
607
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
United States
|
$
|
447,575
|
|
|
$
|
348,575
|
|
|
$
|
260,602
|
|
|
Other countries
|
11,735
|
|
|
10,235
|
|
|
7,873
|
|
||||
Total revenue
|
$
|
459,310
|
|
|
$
|
358,810
|
|
|
$
|
268,475
|
|
|
|
|
|
2018
|
|
|||||||||||||
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
||||
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
||||
Total revenue
|
$
|
99,116
|
|
|
$
|
116,282
|
|
|
$
|
119,647
|
|
|
$
|
124,265
|
|
||
Operating income
|
6,514
|
|
|
13,018
|
|
|
9,343
|
|
|
2,836
|
|
||||||
Net income (loss)
|
4,979
|
|
|
10,571
|
|
|
6,946
|
|
|
(548
|
)
|
||||||
Net income (loss) attributable to Shake Shack Inc.
|
3,508
|
|
|
7,604
|
|
|
5,025
|
|
|
(958
|
)
|
||||||
Earnings (loss) per share
(1)
:
|
|
|
|
|
|
|
|
||||||||||
|
Basic
|
$
|
0.13
|
|
|
$
|
0.27
|
|
|
$
|
0.17
|
|
|
$
|
(0.03
|
)
|
|
|
Diluted
|
$
|
0.13
|
|
|
$
|
0.26
|
|
|
$
|
0.17
|
|
|
$
|
(0.03
|
)
|
|
|
|
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)
|
3,682
|
|
|
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
|
)
|
(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 26
2018 |
|
|
December 27
2017 |
|
||
ASSETS
|
|
|
|
||||||
Current assets:
|
|
|
|
||||||
|
Cash
|
$
|
5,686
|
|
|
$
|
4,988
|
|
|
|
Prepaid expenses
|
135
|
|
|
100
|
|
|||
|
Total current assets
|
5,821
|
|
|
5,088
|
|
|||
Deferred income taxes, net
|
242,353
|
|
|
185,750
|
|
||||
Investment in subsidiaries
|
185,331
|
|
|
142,314
|
|
||||
TOTAL ASSETS
|
$
|
433,505
|
|
|
$
|
333,152
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||||
Current liabilities:
|
|
|
|
||||||
|
Accrued expenses
|
171
|
|
|
70
|
|
|||
|
Due to SSE Holdings
|
3,534
|
|
|
4,217
|
|
|||
|
Current portion of liabilities under tax receivable agreement
|
5,804
|
|
|
937
|
|
|||
|
Total current liabilities
|
9,509
|
|
|
5,224
|
|
|||
Liabilities under tax receivable agreement, net of current portion
|
197,921
|
|
|
158,436
|
|
||||
Total liabilities
|
207,430
|
|
|
163,660
|
|
||||
Commitments and contingencies
|
|
|
|
||||||
Stockholders' equity:
|
|
|
|
||||||
|
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 26, 2018 and December 27, 2017, respectively.
|
—
|
|
|
—
|
|
|||
|
Class A common stock, $0.001 par value—200,000,000 shares authorized; 29,520,833 and 26,527,477 shares issued and outstanding as of December 26, 2018 and December 27, 2017, respectively.
|
30
|
|
|
27
|
|
|||
|
Class B common stock, $0.001 par value—35,000,000 shares authorized; 7,557,347 and 10,250,007 shares issued and outstanding as of December 26, 2018 and December 27, 2017, respectively.
|
8
|
|
|
10
|
|
|||
|
Additional paid-in capital
|
195,633
|
|
|
153,105
|
|
|||
|
Retained earnings
|
30,404
|
|
|
16,399
|
|
|||
|
Accumulated other comprehensive loss
|
—
|
|
|
(49
|
)
|
|||
|
Total stockholders' equity
|
226,075
|
|
|
169,492
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
433,505
|
|
|
$
|
333,152
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|||
Intercompany revenue
|
$
|
2,055
|
|
|
$
|
1,466
|
|
|
$
|
1,603
|
|
||
TOTAL REVENUE
|
2,055
|
|
|
1,466
|
|
|
1,603
|
|
|||||
General and administrative expenses
|
1,933
|
|
|
1,692
|
|
|
1,603
|
|
|||||
TOTAL EXPENSES
|
1,933
|
|
|
1,692
|
|
|
1,603
|
|
|||||
OPERATING INCOME (LOSS)
|
122
|
|
|
(226
|
)
|
|
—
|
|
|||||
Equity in net income of subsidiaries
|
21,537
|
|
|
22,090
|
|
|
16,982
|
|
|||||
Other income
|
78
|
|
|
127,221
|
|
|
688
|
|
|||||
Interest expense
|
(14
|
)
|
|
(50
|
)
|
|
(16
|
)
|
|||||
INCOME BEFORE INCOME TAXES
|
21,723
|
|
|
149,035
|
|
|
17,654
|
|
|||||
Income tax expense
|
6,544
|
|
|
149,355
|
|
|
5,208
|
|
|||||
NET INCOME (LOSS)
|
$
|
15,179
|
|
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|||
Net income (loss)
|
$
|
15,179
|
|
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||||
|
Available-for-sale securities
(1)
:
|
|
|
|
|
|
|||||||
|
|
Change in net unrealized holding losses
|
(3
|
)
|
|
(67
|
)
|
|
(22
|
)
|
|||
|
|
Less: reclassification adjustments for net realized losses included in net income
|
13
|
|
|
33
|
|
|
12
|
|
|||
|
|
Net change
|
10
|
|
|
(34
|
)
|
|
(10
|
)
|
|||
OTHER COMPREHENSIVE INCOME (LOSS)
|
10
|
|
|
(34
|
)
|
|
(10
|
)
|
|||||
COMPREHENSIVE INCOME (LOSS)
|
$
|
15,189
|
|
|
$
|
(354
|
)
|
|
$
|
12,436
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|||||||||
|
|
|
|
|
|
December 26
2018 |
|
|
December 27
2017 |
|
|
December 28
2016 |
|
|||
OPERATING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Net income (loss)
|
$
|
15,179
|
|
|
$
|
(320
|
)
|
|
$
|
12,446
|
|
|||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|||||||||||
|
Equity in net income of subsidiaries
|
(21,537
|
)
|
|
(22,090
|
)
|
|
(16,982
|
)
|
|||||||
|
Equity-based compensation
|
252
|
|
|
234
|
|
|
189
|
|
|||||||
|
Non-cash reimbursement revenue treated as investment
|
—
|
|
|
—
|
|
|
(189
|
)
|
|||||||
|
Deferred income taxes
|
777
|
|
|
146,095
|
|
|
(462
|
)
|
|||||||
|
Other non-cash income
|
(78
|
)
|
|
(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
|
(7,103
|
)
|
|
(5,339
|
)
|
|
214
|
|
||||||
|
|
Accrued expenses
|
5,669
|
|
|
21
|
|
|
(11
|
)
|
||||||
|
|
Other current liabilities
|
14
|
|
|
(17
|
)
|
|
17
|
|
||||||
|
|
Income taxes payable
|
—
|
|
|
2,990
|
|
|
5,023
|
|
||||||
NET CASH USED IN OPERATING ACTIVITIES
|
(6,827
|
)
|
|
(5,640
|
)
|
|
(446
|
)
|
||||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Purchases of LLC Interests from SSE Holdings
|
(11,142
|
)
|
|
(5,522
|
)
|
|
(4,559
|
)
|
||||||||
Return of investment in SSE Holdings
|
2,053
|
|
|
4,101
|
|
|
2,694
|
|
||||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(9,089
|
)
|
|
(1,421
|
)
|
|
(1,865
|
)
|
||||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|||||||||||
Proceeds from issuance of Class A common stock to SSE Holdings upon settlement of equity awards
|
11,142
|
|
|
5,522
|
|
|
2,489
|
|
||||||||
Proceeds from stock option exercises
|
5,472
|
|
|
7,586
|
|
|
3,185
|
|
||||||||
Payments under tax receivable agreement
|
—
|
|
|
(4,844
|
)
|
|
—
|
|
||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
16,614
|
|
|
8,264
|
|
|
5,674
|
|
||||||||
INCREASE IN CASH
|
698
|
|
|
1,203
|
|
|
3,363
|
|
||||||||
CASH AT BEGINNING OF PERIOD
|
4,988
|
|
|
3,785
|
|
|
422
|
|
||||||||
CASH AT END OF PERIOD
|
$
|
5,686
|
|
|
$
|
4,988
|
|
|
$
|
3,785
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Cash paid for:
|
|
|
|
|
|
|||||||||||
|
Income taxes
|
$
|
185
|
|
|
$
|
253
|
|
|
$
|
576
|
|
||||
|
Interest
|
—
|
|
|
2
|
|
|
—
|
|
|||||||
Non-cash investing activities:
|
|
|
|
|
|
|||||||||||
|
Accrued contribution related to stock option exercises
|
5,472
|
|
|
7,586
|
|
|
1,116
|
|
|||||||
|
Class A common stock issued in connection with the acquisition of LLC Interests upon redemption by the non-controlling interest holders
|
15,202
|
|
|
4,415
|
|
|
18,944
|
|
|||||||
|
Non-cash contribution made in connection with equity awards granted to employees of SSE Holdings
|
5,999
|
|
|
5,497
|
|
|
5,304
|
|
|||||||
Non-cash financing activities:
|
|
|
|
|
|
|||||||||||
|
Cancellation of Class B common stock in connection with the Organizational Transactions
|
|
|
|
|
|
||||||||||
|
Cancellation of Class B common stock in connection with the redemption of LLC Interests
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|||||||
|
Establishment of liabilities under tax receivable agreement
|
44,338
|
|
|
18,973
|
|
|
100,063
|
|
|
|
|
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
|
|
Fiscal year ended December 26, 2018
|
|
$
|
10,114
|
|
|
$
|
782
|
|
|
$
|
—
|
|
|
$
|
(3,971
|
)
|
|
$
|
6,925
|
|
(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-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
|
|
|
||
†
|
|
8-K
|
|
10.1
|
|
1/5/2017
|
|
|
||
†
|
|
8-K
|
|
10.1
|
|
5/1/2017
|
|
|
||
†
|
|
8-K
|
|
10.1
|
|
10/26/2018
|
|
|
||
†
|
|
10-K
|
|
10.2
|
|
2/26/2018
|
|
|
||
†
|
|
10-K
|
|
10.19.1
|
|
2/26/2018
|
|
|
||
†
|
|
10-K
|
|
10.19.2
|
|
2/26/2018
|
|
|
||
|
|
|
|
|
|
|
|
*
|
||
|
|
|
|
|
|
|
|
*
|
||
|
|
|
|
|
|
|
|
*
|
||
|
|
|
|
|
|
|
|
*
|
||
|
|
|
|
|
|
|
|
#
|
||
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 25, 2019
|
|
Chief Financial Officer
|
Signature
|
|
Title
|
Date
|
|
|
|
February 25, 2019
|
/s/ Randy Garutti
|
|
Chief Executive Officer and Director
|
|
Randy Garutti
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Tara Comonte
|
|
Chief Financial Officer
|
February 25, 2019
|
Tara Comonte
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
/s/ Daniel Meyer
|
|
Chairman of the Board of Directors
|
February 25, 2019
|
Daniel Meyer
|
|
|
|
|
|
|
|
/s/ Anna Fieler
|
|
Director
|
February 25, 2019
|
Anna Fieler
|
|
|
|
|
|
|
|
/s/ Jeff Flug
|
|
Director
|
February 25, 2019
|
Jeff Flug
|
|
|
|
|
|
|
|
/s/ Jenna Lyons
|
|
Director
|
February 25, 2019
|
Jenna Lyons
|
|
|
|
|
|
|
|
/s/ Joshua Silverman
|
|
Director
|
February 25, 2019
|
Joshua Silverman
|
|
|
|
|
|
|
|
/s/ Jonathan D. Sokoloff
|
|
Director
|
February 25, 2019
|
Jonathan D. Sokoloff
|
|
|
|
|
|
|
|
/s/ Robert Vivian
|
|
Director
|
February 25, 2019
|
Robert Vivian
|
|
|
|
A.
|
Removal of the SEG Stockholders as Parties to the Stockholders Agreement
. The Stockholders Agreement shall be amended as follows: the SEG Stockholders shall be removed as parties thereto, and all references and other provisions of the Stockholders Agreement pertaining to the SEG Stockholders, and participation by the SEG Stockholders in the Stockholders Agreement, are hereby terminated as of the Effective Date.
|
B.
|
Full Force and Effect
. All other provisions of the Stockholders Agreement not otherwise expressly amended herein shall remain in full force and effect.
|
C.
|
Governing Law
. The terms and conditions of this Amendment shall be governed by and construed in accordance with the laws of the State of Delaware.
|
D.
|
Counterparts
. This Amendment may be executed in two or more counterparts, each of which when taken together shall constitute a single instrument.
|
Funded Net Debt to EBITDA Ratio
|
≤ 1.00:1.00
|
≤ 1.50:1.00
but
> 1:00:1.00
|
≤ 2.00:1.00
but
> 1:50:1.00
|
≤ 2.50:1.00
but
> 2.00:1.00
|
> 2.50:1.00
|
CB Floating Rate
|
0.00%
|
0.00%
|
0.25%
|
0.50%
|
0.75%
|
Adjusted LIBO Rate
|
2.25%
|
2.50%
|
2.75%
|
3.00%
|
3.25%
|
|
SHAKE SHACK INC.
|
|
|
|
|
|
By: _____________________________________________
|
|
Randy Garutti
|
|
Chief Executive Officer
|
|
|
PARTICIPANT
|
|
|
|
|
|
By: _____________________________________________
|
|
Name:
|
|
Vesting Date
|
Number of Issued Restricted Stock Units Vesting
|
[Month] [Day], [Year]
|
[# OF RSUs VESTING] (first anniversary of the Award Date)
|
[Month] [Day], [Year]
|
[# OF RSUs VESTING] (second anniversary of the Award Date)
|
[Month] [Day], [Year]
|
[# OF RSUs VESTING] (third anniversary of the Award Date) Etc.
|
|
SHAKE SHACK INC.
|
|
|
|
|
|
By: _____________________________________________
|
|
Randy Garutti
|
|
Chief Executive Officer
|
|
|
PARTICIPANT
|
|
|
|
|
|
By: _____________________________________________
|
|
Name:
|
|
|
SHAKE SHACK INC.
|
|
|
|
|
|
By: _____________________________________________
|
|
Randy Garutti
|
|
Chief Executive Officer
|
|
|
PARTICIPANT
|
|
|
|
|
|
By: _____________________________________________
|
|
Name:
|
|
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 26, 2018
.
|
(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 94 subsidiaries have been omitted, none of which operated outside the United States.
|
(1)
|
Form S-8, No. 333-201798
|
(2)
|
Form S-3, No. 333-225528
|
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 25, 2019
|
|
|
/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 25, 2019
|
|
|
/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 25, 2019
|
|
|
/s/ Randy Garutti
|
|
Randy Garutti
|
|
Chief Executive Officer and Director
|
Date: February 25, 2019
|
|
|
/s/ Tara Comonte
|
|
Tara Comonte
|
|
Chief Financial Officer
|