|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
47-3494862
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
|
|
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5501 LBJ Freeway, 5th Floor,
Dallas, Texas
|
|
75240
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Securities registered pursuant to Section 12(b) of the Act:
|
||
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
WING
|
NASDAQ Global Market
|
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
|
|
Emerging growth company
|
¨
|
|
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Page
|
PART I
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
||
|
|
|
|
March 30,
2019 |
|
December 29,
2018 |
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
13,625
|
|
|
$
|
12,493
|
|
Restricted cash
|
4,824
|
|
|
4,462
|
|
||
Accounts receivable, net
|
4,918
|
|
|
5,764
|
|
||
Prepaid expenses and other current assets
|
1,641
|
|
|
2,056
|
|
||
Advertising fund assets, restricted
|
9,407
|
|
|
5,131
|
|
||
Total current assets
|
34,415
|
|
|
29,906
|
|
||
Property and equipment, net
|
8,299
|
|
|
8,338
|
|
||
Goodwill
|
49,655
|
|
|
49,655
|
|
||
Trademarks
|
32,700
|
|
|
32,700
|
|
||
Customer relationships, net
|
13,902
|
|
|
14,233
|
|
||
Other non-current assets
|
12,479
|
|
|
4,917
|
|
||
Total assets
|
$
|
151,450
|
|
|
$
|
139,749
|
|
Liabilities and stockholders' deficit
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
2,190
|
|
|
$
|
2,750
|
|
Other current liabilities
|
14,222
|
|
|
16,201
|
|
||
Current portion of debt
|
3,200
|
|
|
2,400
|
|
||
Advertising fund liabilities
|
9,407
|
|
|
5,131
|
|
||
Total current liabilities
|
29,019
|
|
|
26,482
|
|
||
Long-term debt, net
|
308,931
|
|
|
309,374
|
|
||
Deferred revenues, net of current
|
21,188
|
|
|
21,885
|
|
||
Deferred income tax liabilities, net
|
4,652
|
|
|
4,866
|
|
||
Other non-current liabilities
|
8,138
|
|
|
1,972
|
|
||
Total liabilities
|
371,928
|
|
|
364,579
|
|
||
Commitments and contingencies (see Note 8)
|
|
|
|
|
|
||
Stockholders' deficit
|
|
|
|
||||
Common stock, $0.01 par value; 100,000,000 shares authorized; 29,399,276 and 29,296,939 shares issued and outstanding as of March 30, 2019 and December 29, 2018, respectively
|
294
|
|
|
293
|
|
||
Additional paid-in-capital
|
206
|
|
|
1,036
|
|
||
Accumulated deficit
|
(220,978
|
)
|
|
(226,159
|
)
|
||
Total stockholders' deficit
|
(220,478
|
)
|
|
(224,830
|
)
|
||
Total liabilities and stockholders' deficit
|
$
|
151,450
|
|
|
$
|
139,749
|
|
|
Thirteen Weeks Ended
|
||||||
|
March 30,
2019 |
|
March 31,
2018 |
||||
Revenue:
|
|
|
|
||||
Royalty revenue, franchise fees and other
|
$
|
21,328
|
|
|
$
|
17,781
|
|
Advertising fees and related income
|
13,210
|
|
|
8,605
|
|
||
Company-owned restaurant sales
|
13,515
|
|
|
11,003
|
|
||
Total revenue
|
48,053
|
|
|
37,389
|
|
||
Costs and expenses:
|
|
|
|
||||
Cost of sales
(1)
|
9,730
|
|
|
7,397
|
|
||
Advertising expenses
|
12,734
|
|
|
8,643
|
|
||
Selling, general and administrative
|
12,542
|
|
|
10,833
|
|
||
Depreciation and amortization
|
1,276
|
|
|
950
|
|
||
Total costs and expenses
|
36,282
|
|
|
27,823
|
|
||
Operating income
|
11,771
|
|
|
9,566
|
|
||
Interest expense, net
|
4,410
|
|
|
1,736
|
|
||
Income before income tax expense
|
7,361
|
|
|
7,830
|
|
||
Income tax expense
|
755
|
|
|
1,662
|
|
||
Net income
|
$
|
6,606
|
|
|
$
|
6,168
|
|
|
|
|
|
||||
Earnings per share
|
|
|
|
||||
Basic
|
$
|
0.23
|
|
|
$
|
0.21
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.21
|
|
|
|
|
|
||||
Weighted average shares outstanding
|
|
|
|
||||
Basic
|
29,337
|
|
|
29,116
|
|
||
Diluted
|
29,637
|
|
|
29,503
|
|
||
|
|
|
|
||||
Dividends per share
|
$
|
0.09
|
|
|
$
|
3.24
|
|
|
Common Stock
|
|
|
|
|
|
|
|||||||||||
|
Shares
|
|
Amount
|
|
Additional
Paid-In Capital
|
|
Accumulated Deficit
|
|
Total Stockholders’ Deficit
|
|||||||||
Balance at December 30, 2017
|
29,092,669
|
|
|
291
|
|
|
262
|
|
|
(58,971
|
)
|
|
(58,418
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
6,168
|
|
|
6,168
|
|
||||
Issuance of common stock, net
|
41,159
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Exercise of stock options
|
25,182
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
||||
Tax payments for restricted stock upon vesting
|
(3,187
|
)
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
(142
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
514
|
|
|
—
|
|
|
514
|
|
||||
Dividends paid
|
—
|
|
|
—
|
|
|
(895
|
)
|
|
(93,902
|
)
|
|
(94,797
|
)
|
||||
Balance at March 31, 2018
|
29,155,823
|
|
|
$
|
292
|
|
|
$
|
45
|
|
|
$
|
(146,847
|
)
|
|
$
|
(146,510
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Common Stock
|
|
|
|
|
|
|
|||||||||||
|
Shares
|
|
Amount
|
|
Additional
Paid-In Capital |
|
Accumulated Deficit
|
|
Total Stockholders’ Deficit
|
|||||||||
Balance at December 29, 2018
|
29,296,939
|
|
|
$
|
293
|
|
|
$
|
1,036
|
|
|
$
|
(226,159
|
)
|
|
$
|
(224,830
|
)
|
Adjustment for ASC 842 adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
154
|
|
|
154
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
6,606
|
|
|
6,606
|
|
||||
Issuance of common stock, net
|
60,553
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Exercise of stock options
|
54,253
|
|
|
—
|
|
|
158
|
|
|
—
|
|
|
158
|
|
||||
Tax payments for restricted stock upon vesting
|
(12,469
|
)
|
|
—
|
|
|
—
|
|
|
(833
|
)
|
|
(833
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
838
|
|
|
—
|
|
|
838
|
|
||||
Dividends paid
|
—
|
|
|
—
|
|
|
(1,825
|
)
|
|
(746
|
)
|
|
(2,571
|
)
|
||||
Balance at March 30, 2019
|
29,399,276
|
|
|
$
|
294
|
|
|
$
|
206
|
|
|
$
|
(220,978
|
)
|
|
$
|
(220,478
|
)
|
|
Thirteen Weeks Ended
|
||||||
|
March 30,
2019 |
|
March 31,
2018 |
||||
|
|
|
|
||||
Operating activities
|
|
|
|
|
|
||
Net income
|
$
|
6,606
|
|
|
$
|
6,168
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,276
|
|
|
950
|
|
||
Deferred income taxes
|
(258
|
)
|
|
38
|
|
||
Stock-based compensation expense
|
838
|
|
|
514
|
|
||
Amortization of debt issuance costs
|
376
|
|
|
85
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
846
|
|
|
707
|
|
||
Prepaid expenses and other assets
|
1,107
|
|
|
327
|
|
||
Advertising fund assets and liabilities, net
|
4,217
|
|
|
1,398
|
|
||
Accounts payable and other current liabilities
|
(4,480
|
)
|
|
(703
|
)
|
||
Deferred revenue
|
(507
|
)
|
|
14
|
|
||
Other non-current liabilities
|
(423
|
)
|
|
(42
|
)
|
||
Cash provided by operating activities
|
9,598
|
|
|
9,456
|
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
||||
Purchases of property and equipment
|
(641
|
)
|
|
(426
|
)
|
||
Acquisition of restaurant from franchisee
|
—
|
|
|
(1,900
|
)
|
||
Cash used in investing activities
|
(641
|
)
|
|
(2,326
|
)
|
||
|
|
|
|
||||
Financing activities
|
|
|
|
||||
Proceeds from exercise of stock options
|
158
|
|
|
165
|
|
||
Borrowings of long-term debt
|
—
|
|
|
229,108
|
|
||
Repayments of long-term debt
|
—
|
|
|
(139,500
|
)
|
||
Payment of deferred financing costs
|
—
|
|
|
(782
|
)
|
||
Tax payments for restricted stock upon vesting
|
(833
|
)
|
|
(142
|
)
|
||
Dividends paid
|
(2,571
|
)
|
|
(94,796
|
)
|
||
Cash used in financing activities
|
(3,246
|
)
|
|
(5,947
|
)
|
||
|
|
|
|
||||
Net change in cash, cash equivalents, and restricted cash
|
5,711
|
|
|
1,183
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
20,940
|
|
|
6,392
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
26,651
|
|
|
$
|
7,575
|
|
|
March 30, 2019
|
|
December 29, 2018
|
||||
Cash and cash equivalents
|
$
|
13,625
|
|
|
$
|
12,493
|
|
Restricted cash
|
4,824
|
|
|
4,462
|
|
||
Restricted cash, included in Advertising fund assets, restricted
|
8,202
|
|
|
3,985
|
|
||
Total cash, cash equivalents, and restricted cash
|
$
|
26,651
|
|
|
$
|
20,940
|
|
|
Thirteen Weeks Ended
|
||||
|
March 30,
2019 |
|
March 31,
2018 |
||
Basic weighted average shares outstanding
|
29,337
|
|
|
29,116
|
|
Dilutive shares
|
300
|
|
|
387
|
|
Diluted weighted average shares outstanding
|
29,637
|
|
|
29,503
|
|
|
Fair Value
Hierarchy
|
|
March 30, 2019
|
|
December 29, 2018
|
||||||||||||
|
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
|||||||||
Securitized Financing Facility:
|
|
|
|
|
|
|
|
|
|
||||||||
2018-1 Class A-2 Senior Secured Notes
(1)
|
Level 2
|
|
$
|
320,000
|
|
|
$
|
328,474
|
|
|
$
|
320,000
|
|
|
$
|
320,000
|
|
Remainder of fiscal year 2019
|
$
|
2,400
|
|
Fiscal year 2020
|
3,200
|
|
|
Fiscal year 2021
|
3,200
|
|
|
Fiscal year 2022
|
3,200
|
|
|
Fiscal year 2023
|
308,000
|
|
|
Total
|
$
|
320,000
|
|
|
Thirteen Weeks Ended
|
||
|
March 30,
2019 |
||
Operating lease cost
(a)
|
$
|
502
|
|
Variable lease cost
(b)
|
125
|
|
|
Total lease cost
|
$
|
627
|
|
|
Thirteen Weeks Ended
|
||
|
March 30,
2019 |
||
Operating cash flow information:
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
545
|
|
|
|
|
Thirteen Weeks Ended
|
||
|
Balance Sheet Classification
|
|
March 30,
2019 |
||
Right-of-use assets
|
Other non-current assets
|
|
$
|
8,170
|
|
Current lease liabilities
|
Other current liabilities
|
|
1,751
|
|
|
Non-current lease liabilities
|
Other non-current liabilities
|
|
8,138
|
|
|
Thirteen Weeks Ended
|
|
|
March 30,
2019 |
|
Weighted average remaining lease term of operating leases
|
5.6 years
|
|
Weighted average discount rate of operating leases
|
4.97
|
%
|
Fiscal year 2019
|
$
|
1,636
|
|
Fiscal year 2020
|
2,213
|
|
|
Fiscal year 2021
|
2,003
|
|
|
Fiscal year 2022
|
1,798
|
|
|
Fiscal year 2023
|
1,520
|
|
|
Thereafter
|
2,140
|
|
|
Total lease payments
|
11,310
|
|
|
Less: imputed interest
|
(1,421
|
)
|
|
Present value of lease liabilities
|
$
|
9,889
|
|
Fiscal year 2019
|
$
|
2,181
|
|
Fiscal year 2020
|
2,214
|
|
|
Fiscal year 2021
|
2,005
|
|
|
Fiscal year 2022
|
1,800
|
|
|
Fiscal year 2023
|
1,523
|
|
|
Thereafter
|
2,145
|
|
|
Total
|
$
|
11,868
|
|
|
Stock Options
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value
|
|
Weighted Average Remaining Term
|
|||||
Outstanding - December 29, 2018
|
236
|
|
|
$
|
6.04
|
|
|
$
|
13,848
|
|
|
4.8
|
Options granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options exercised
|
(54
|
)
|
|
2.92
|
|
|
|
|
|
|||
Options canceled
|
(1
|
)
|
|
40.98
|
|
|
|
|
|
|||
Outstanding - March 30, 2019
|
181
|
|
|
$
|
6.43
|
|
|
$
|
12,526
|
|
|
4.7
|
|
Restricted Stock Units
|
|
Weighted Average Grant Date Fair Value
|
|
Performance Stock Units
|
|
Weighted Average Grant Date Fair Value
|
||||||
Outstanding - December 29, 2018
|
103
|
|
|
$
|
36.18
|
|
|
130
|
|
|
$
|
40.46
|
|
Units granted
|
43
|
|
|
65.86
|
|
|
44
|
|
|
65.86
|
|
||
Units vested
|
(40
|
)
|
|
34.02
|
|
|
(21
|
)
|
|
36.10
|
|
||
Units canceled
|
(10
|
)
|
|
35.68
|
|
|
(8
|
)
|
|
35.21
|
|
||
Outstanding - March 30, 2019
|
96
|
|
|
$
|
51.05
|
|
|
145
|
|
|
$
|
49.46
|
|
|
Thirteen Weeks Ended
|
||||||
|
March 30,
2019 |
|
March 31,
2018 |
||||
Revenue:
|
|
|
|
||||
Franchise segment
|
$
|
34,538
|
|
|
$
|
26,386
|
|
Company segment
|
13,515
|
|
|
11,003
|
|
||
Total segment revenue
|
$
|
48,053
|
|
|
$
|
37,389
|
|
|
|
|
|
||||
Segment Profit:
|
|
|
|
||||
Franchise segment
|
$
|
9,255
|
|
|
$
|
8,387
|
|
Company segment
|
2,516
|
|
|
2,641
|
|
||
Total segment profit
|
11,771
|
|
|
11,028
|
|
||
Corporate and other
(1)
|
—
|
|
|
1,462
|
|
||
Interest expense, net
|
4,410
|
|
|
1,736
|
|
||
Income before taxes
|
$
|
7,361
|
|
|
$
|
7,830
|
|
|
|
Thirteen Weeks Ended
|
||||||
|
March 30, 2019
|
|
March 31, 2018
|
||||
Royalty revenue
|
$
|
17,907
|
|
|
$
|
15,386
|
|
Advertising fees and related income
|
13,210
|
|
|
8,605
|
|
||
Franchise fees
|
1,582
|
|
|
685
|
|
|
Thirteen Weeks Ended
|
||||
|
March 30,
2019 |
|
March 31,
2018 |
||
Domestic Franchised Activity:
|
|
|
|
||
Beginning of period
|
1,095
|
|
|
1,004
|
|
Openings
|
20
|
|
|
22
|
|
Closures
|
(3
|
)
|
|
(4
|
)
|
Acquired by Company
|
—
|
|
|
(1
|
)
|
Restaurants end of period
|
1,112
|
|
|
1,021
|
|
|
|
|
|
||
Domestic Company-Owned Activity:
|
|
|
|
||
Beginning of period
|
29
|
|
|
23
|
|
Openings
|
—
|
|
|
—
|
|
Closures
|
—
|
|
|
—
|
|
Acquired from franchisees
|
—
|
|
|
1
|
|
Restaurants end of period
|
29
|
|
|
24
|
|
|
|
|
|
||
Total Domestic Restaurants
|
1,141
|
|
|
1,045
|
|
|
|
|
|
||
International Franchised Activity:
|
|
|
|
||
Beginning of period
|
128
|
|
|
106
|
|
Openings
|
6
|
|
|
6
|
|
Closures
|
(2
|
)
|
|
—
|
|
Restaurants end of period
|
132
|
|
|
112
|
|
|
|
|
|
||
Total System-wide Restaurants
|
1,273
|
|
|
1,157
|
|
|
Thirteen Weeks Ended
|
||||||
|
March 30, 2019
|
|
March 31, 2018
|
||||
Number of system-wide restaurants open at end of period
|
1,273
|
|
|
1,157
|
|
||
System-wide sales
(1)
|
$
|
362,369
|
|
|
$
|
312,981
|
|
Domestic restaurant AUV
|
$
|
1,156
|
|
|
$
|
1,120
|
|
System-wide domestic same store sales growth
|
7.1
|
%
|
|
9.5
|
%
|
||
Company-owned domestic same store sales growth
|
4.7
|
%
|
|
12.5
|
%
|
||
Total revenue
|
$
|
48,053
|
|
|
$
|
37,389
|
|
Net income
|
$
|
6,606
|
|
|
$
|
6,168
|
|
Adjusted EBITDA
(2)
|
$
|
13,885
|
|
|
$
|
12,492
|
|
|
•
|
as a measurement of operating performance because they assist us in comparing the operating performance of our restaurants on a consistent basis, as they remove the impact of items not directly resulting from our core operations;
|
•
|
for planning purposes, including the preparation of our internal annual operating budget and financial projections;
|
•
|
to evaluate the performance and effectiveness of our operational strategies;
|
•
|
to evaluate our capacity to fund capital expenditures and expand our business; and
|
•
|
to calculate incentive compensation payments for our employees, including assessing performance under our annual incentive compensation plan and determining the vesting of performance-based equity awards.
|
•
|
such measures do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
|
•
|
such measures do not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
such measures do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;
|
•
|
such measures do not reflect our tax expense or the cash requirements to pay our taxes;
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
|
•
|
other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.
|
|
Thirteen Weeks Ended
|
||||||
|
March 30,
2019 |
|
March 31,
2018 |
||||
Net income
|
$
|
6,606
|
|
|
$
|
6,168
|
|
Interest expense, net
|
4,410
|
|
|
1,736
|
|
||
Income tax expense
|
755
|
|
|
1,662
|
|
||
Depreciation and amortization
|
1,276
|
|
|
950
|
|
||
EBITDA
|
$
|
13,047
|
|
|
$
|
10,516
|
|
Additional adjustments:
|
|
|
|
||||
Transaction costs
(a)
|
—
|
|
|
1,462
|
|
||
Stock-based compensation expense
(b)
|
838
|
|
|
514
|
|
||
Adjusted EBITDA
|
$
|
13,885
|
|
|
$
|
12,492
|
|
|
|
Thirteen Weeks Ended
|
|
Increase / (Decrease)
|
|||||||||||
|
March 30,
2019 |
|
March 31,
2018 |
|
$
|
|
%
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Royalty revenue, franchise fees and other
|
$
|
21,328
|
|
|
$
|
17,781
|
|
|
$
|
3,547
|
|
|
19.9
|
%
|
Advertising fees and related income
|
13,210
|
|
|
8,605
|
|
|
4,605
|
|
|
53.5
|
%
|
|||
Company-owned restaurant sales
|
13,515
|
|
|
11,003
|
|
|
2,512
|
|
|
22.8
|
%
|
|||
Total revenue
|
48,053
|
|
|
37,389
|
|
|
10,664
|
|
|
28.5
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Cost of sales
(1)
|
9,730
|
|
|
7,397
|
|
|
2,333
|
|
|
31.5
|
%
|
|||
Advertising expenses
|
12,734
|
|
|
8,643
|
|
|
4,091
|
|
|
47.3
|
%
|
|||
Selling, general and administrative
|
12,542
|
|
|
10,833
|
|
|
1,709
|
|
|
15.8
|
%
|
|||
Depreciation and amortization
|
1,276
|
|
|
950
|
|
|
326
|
|
|
34.3
|
%
|
|||
Total costs and expenses
|
36,282
|
|
|
27,823
|
|
|
8,459
|
|
|
30.4
|
%
|
|||
Operating income
|
11,771
|
|
|
9,566
|
|
|
2,205
|
|
|
23.1
|
%
|
|||
Interest expense, net
|
4,410
|
|
|
1,736
|
|
|
2,674
|
|
|
154.0
|
%
|
|||
Income before income tax expense
|
7,361
|
|
|
7,830
|
|
|
(469
|
)
|
|
(6.0
|
)%
|
|||
Income tax expense
|
755
|
|
|
1,662
|
|
|
(907
|
)
|
|
(54.6
|
)%
|
|||
Net income
|
$
|
6,606
|
|
|
$
|
6,168
|
|
|
$
|
438
|
|
|
7.1
|
%
|
|
|
Thirteen Weeks Ended
|
|||||||||||||
|
March 30,
2019 |
|
As a % of company-owned restaurant sales
|
|
March 31,
2018 |
|
As a % of company-owned restaurant sales
|
|||||||
Cost of sales:
|
|
|
|
|
|
|
|
|||||||
Food, beverage and packaging costs
|
$
|
4,816
|
|
|
35.6
|
%
|
|
$
|
3,684
|
|
|
33.5
|
%
|
|
Labor costs
|
3,024
|
|
|
22.4
|
%
|
|
2,385
|
|
|
21.7
|
%
|
|||
Other restaurant operating expenses
|
2,277
|
|
|
16.8
|
%
|
|
1,606
|
|
|
14.6
|
%
|
|||
Vendor rebates
|
(387
|
)
|
|
(2.9
|
)%
|
|
(278
|
)
|
|
(2.5
|
)%
|
|||
Total cost of sales
|
$
|
9,730
|
|
|
72.0
|
%
|
|
$
|
7,397
|
|
|
67.2
|
%
|
|
Thirteen Weeks Ended
|
|
Increase / (Decrease)
|
|||||||||||
|
March 30,
2019 |
|
March 31,
2018 |
|
$
|
|
%
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Franchise segment
|
$
|
34,538
|
|
|
$
|
26,386
|
|
|
$
|
8,152
|
|
|
30.9
|
%
|
Company segment
|
13,515
|
|
|
11,003
|
|
|
2,512
|
|
|
22.8
|
%
|
|||
Total segment revenue
|
$
|
48,053
|
|
|
$
|
37,389
|
|
|
$
|
10,664
|
|
|
28.5
|
%
|
|
|
|
|
|
|
|
|
|||||||
Segment Profit:
|
|
|
|
|
|
|
|
|||||||
Franchise segment
|
$
|
9,255
|
|
|
$
|
8,387
|
|
|
$
|
868
|
|
|
10.3
|
%
|
Company segment
|
2,516
|
|
|
2,641
|
|
|
(125
|
)
|
|
(4.7
|
)%
|
|||
Total segment profit
|
$
|
11,771
|
|
|
$
|
11,028
|
|
|
$
|
743
|
|
|
6.7
|
%
|
|
Thirteen Weeks Ended
|
||||||
|
March 30,
2019 |
|
March 31,
2018 |
||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
9,598
|
|
|
$
|
9,456
|
|
Investing activities
|
(641
|
)
|
|
(2,326
|
)
|
||
Financing activities
|
(3,246
|
)
|
|
(5,947
|
)
|
||
Net change in cash and cash equivalents
|
$
|
5,711
|
|
|
$
|
1,183
|
|
•
|
our ability to effectively implement our growth strategy;
|
•
|
risks associated with changes in food and supply costs;
|
•
|
our relationships with, and the performance of, our franchisees, as well as actions by franchisees that could harm our business;
|
•
|
our ability to identify, recruit and contract with a sufficient number of qualified franchisees;
|
•
|
risks associated with food safety, food-borne illness and other health concerns;
|
•
|
our ability to successfully expand into new markets;
|
•
|
our ability to effectively compete within our industry;
|
•
|
risks associated with interruptions in our supply chain;
|
•
|
risks associated with our future performance and operating results falling below the expectations of securities analysts and investors;
|
•
|
risks associated with data privacy, cyber security, and the use and implementation of information technology;
|
•
|
risks associated with our increasing dependence on digital commerce platforms;
|
•
|
uncertainty in the law with respect to the assignment of liabilities in the franchise business model;
|
•
|
risks associated with litigation against us or our franchisees;
|
•
|
our ability to successfully advertise and market our business;
|
•
|
risks associated with changes in customer preferences and perceptions;
|
•
|
our ability to comply with government regulations relating to food products and franchising, including increased costs associated with new or changing regulations;
|
•
|
risks associated with the geographic concentration of our business;
|
•
|
our ability to maintain adequate insurance coverage for our business;
|
•
|
risks associated with damage to our reputation or lack of acceptance of our brand in existing or new markets;
|
•
|
our ability to comply with the terms of our securitized debt financing and generate sufficient cash flows to satisfy our significant debt service obligations thereunder;
|
•
|
our ability to attract and retain our executive officers and other key employees; and
|
•
|
our ability to protect our intellectual property, including trademarks and trade secrets.
|
Exhibit No.
|
Description
|
3.1
|
|
3.2
|
|
10.1†
|
|
10.2†
|
|
10.3†
|
|
10.4*†
|
|
31.1*
|
|
31.2*
|
|
32.1**
|
|
32.2**
|
|
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
|
|
|
|
|
|
Wingstop Inc.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
May 8, 2019
|
|
By:
|
/s/ Charles R. Morrison
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
Date:
|
May 8, 2019
|
|
By:
|
/s/ Michael J. Skipworth
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Wingstop Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 8, 2019
|
|
|
By:
|
/s/ Charles R. Morrison
|
|
Chairman and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Wingstop Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 8, 2019
|
|
|
By:
|
/s/ Michael J. Skipworth
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 8, 2019
|
|
|
By:
|
/s/ Charles R. Morrison
|
|
Chairman and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 8, 2019
|
|
|
By:
|
/s/ Michael J. Skipworth
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
|