美國
證券交易委員會
華盛頓特區20549
表格
根據1934年證券交易法第13或15(d)條，本季度報告 |
截至季度結束日期的財務報告
或者
根據1934年證券交易法第13或15（d)條的轉型報告 |
委託文件編號：001-39866
(根據其章程規定的註冊人準確名稱)
(所在州或其他司法管轄區) | （IRS僱主 | |
成立或組織的州） | 唯一識別號碼） |
，（主要行政辦公地址） | (郵政編碼) |
(
(註冊人電話號碼，包括區號)
根據1934年證券交易法第12(b)條註冊的證券:
每種類別的證券 |
| 交易代碼 |
| 每個交易所的名稱 |
本基金尋求於東歐地區註冊的主要權益關聯發行人的長期升值投資。 |
檢查標記是否申報了《證券交易法》第13或15(d)條規定的所有報告，對於在過去的12個月內（或對於註冊申報此類報告的較短期間）進行檢查，並且是否在過去的90天內受到這些申報要求的影響。
請在12個月內（或較短期間內）向規定的「S-t條例第405規則」提交每個交互數據文件的電子版本
請在以下選項前打勾表示公司屬於大型快速記錄者、快速記錄者、非快速記錄者、小額報告公司還是新興增長公司。可參考《交易所法規》規則120億.2中對「大型快速記錄者」、「快速記錄者」、「小額報告公司」和「新興增長公司」的定義。
☒ |
| 加速文件提交人 | ☐ | |
非加速文件提交人 | ☐ | 較小的報告公司 | ||
新興成長公司 |
如果是新興成長型公司，請在選擇框中勾選：註冊人是否選擇不使用根據《1934年證券交易法第13(a)條規定》提供的任何新或修訂的財務會計準則的延長過渡期。. ☐
請勾選表示註冊申報人是否爲外殼公司（根據交易所12b-2號規則定義）。是
截至2024年7月29日，
第一部分—財務信息
項目1。 基本報表。
芝樂坊餐館公司股份有限公司
簡明合併資產負債表
（以千爲單位，除每股數據外）
7月2日 | 1月2日, | |||||
| 2024 |
| 2024 | |||
(未經審計) | ||||||
資產 | ||||||
流動資產： | ||||||
現金及現金等價物 | $ | | $ | | ||
應收賬款及其他應收款項 | | | ||||
應收所得稅款項 |
| |
| | ||
存貨 |
| |
| | ||
預付費用 |
| |
| | ||
總流動資產 |
| |
| | ||
資產和設備，淨值 |
| |
| | ||
8,070,041 | ||||||
無形資產, 淨額 |
| |
| | ||
營業租賃資產 |
| |
| | ||
其他 | | | ||||
其他資產總計 | | | ||||
總資產 | $ | | $ | | ||
負債和股東權益 | ||||||
流動負債: | ||||||
應付賬款 | $ | | $ | | ||
禮品卡負債 |
| |
| | ||
經營租賃負債 | | | ||||
其他應計費用 | | | ||||
流動負債合計 | | | ||||
長期債務 |
| |
| | ||
經營租賃負債 |
| |
| | ||
其他非流動負債 | | | ||||
負債合計 | | | ||||
承諾和 contingencies（注 7） |
|
| ||||
股東權益: | ||||||
優先股，$0.0001 | ||||||
普通股，每股面值爲 $0.0001； | | | ||||
額外實收資本 |
| |
| | ||
保留盈餘 |
| |
| | ||
包括消費稅在內的國庫股 |
| ( |
| ( | ||
累計其他綜合損失 |
| ( |
| ( | ||
股東權益總額 |
| |
| | ||
負債和股東權益總額 | $ | | $ | | ||
「Rule 10b5-1交易安排」或「非Rule 10b5-1交易安排」，即根據S-k資料第408項規定定義的交易安排。
1
芝樂坊餐館公司股份有限公司
簡明合併利潤表
（以千爲單位，除每股數據外）
(未經審計)
十三 | 十三 | 二十六 | 二十六 | |||||||||
| 13個星期結束 | 13個星期結束 | 13個星期結束 | 13個星期結束 | ||||||||
2024年7月2日 |
| 2023年7月4日 |
| 2024年7月2日 |
| 2023年7月4日 | ||||||
收入 | $ | | $ | | $ | | $ | | ||||
成本和費用： | ||||||||||||
食品和飲料成本 |
| |
| |
| |
| | ||||
勞務費用 |
| |
| |
| |
| | ||||
其他經營成本和費用 |
| |
| |
| |
| | ||||
一般及管理費用 |
| |
| |
| |
| | ||||
折舊和攤銷費用 |
| |
| |
| |
| | ||||
資產減值和租約終止（收入）/費用 | ( | ( | | | ||||||||
收購相關的待定對賭、補償和攤銷費用 | | | | | ||||||||
開業前費用 |
| |
| |
| |
| | ||||
總成本和費用 |
| |
| |
| |
| | ||||
營業利潤 |
| |
| |
| |
| | ||||
利息和其他費用，淨額 |
| ( |
| ( |
| ( |
| ( | ||||
稅前收入 |
| |
| |
| |
| | ||||
所得稅費用 |
| |
| |
| |
| | ||||
淨收入 | $ | | $ | | $ | | $ | | ||||
每股淨利潤： | ||||||||||||
基本 | $ | | $ | | $ | | $ | | ||||
稀釋（注10） | $ | | $ | | $ | | $ | | ||||
| ||||||||||||
基本 |
| |
| |
| |
| | ||||
稀釋的 |
| |
| |
| |
| | ||||
「Rule 10b5-1交易安排」或「非Rule 10b5-1交易安排」，即根據S-k資料第408項規定定義的交易安排。
2
芝樂坊餐館公司股份有限公司
綜合收益簡明合併報表
（以千爲單位）
(未經審計)
十三 | 十三 | 二十六 | 二十六 | |||||||||
| 13個星期結束 |
| 13個星期結束 |
| 13個星期結束 |
| 13個星期結束 | |||||
2024年7月2日 | 2023年7月4日 | 2024年7月2日 | 2023年7月4日 | |||||||||
淨收入 | $ | | $ | | $ | | $ | | ||||
其他綜合損益： |
|
|
|
| ||||||||
外幣翻譯調整 |
| ( |
| |
| ( |
| | ||||
其他全面損益/(增益) |
| ( |
| |
| ( |
| | ||||
總綜合收益 | $ | | $ | | $ | | $ | | ||||
「Rule 10b5-1交易安排」或「非Rule 10b5-1交易安排」，即根據S-k資料第408項規定定義的交易安排。
3
芝樂坊餐館公司股份有限公司
股東權益的簡明合併報表
（以千爲單位，除每股數據外）
(未經審計)
截至2024年7月2日止二十六週：
|
|
|
|
|
| 累積的 |
| |||||||||||||
| 額外的 | 其他 | ||||||||||||||||||
普通股 | 實收資本 | 留存收益 | 國庫 | 綜合 | ||||||||||||||||
| 股份 |
| 數量 |
| 資本 |
| 收益 |
| 股票 |
| （虧損）/收入 |
| 總費用 | |||||||
2024年1月2日餘額 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
淨收入 | — | — | — | | — | — | | |||||||||||||
外幣翻譯調整 | — | — | — | — | — | ( | ( | |||||||||||||
宣佈普通股現金分紅，扣除沒收部分，$ | — | — | — | ( | — | — | ( | |||||||||||||
以股票爲基礎的報酬計劃 | | | | — | — | — | | |||||||||||||
庫藏股購買，包括消費稅 | — | — | — | — | ( | — | ( | |||||||||||||
2024年4月2日的餘額 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
淨收入 | — | — | — | | — | — | | |||||||||||||
外幣翻譯調整 | — | — | — | — | — | ( | ( | |||||||||||||
現金分紅宣佈普通股，減去沒收部分，$ | — | — | — | ( | — | — | ( | |||||||||||||
以股票爲基礎的報酬計劃 | | | | — | — | — | | |||||||||||||
購買庫藏股，含增值稅 | — | — | — | — | ( | — | ( | |||||||||||||
2024年7月2日餘額 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
截至2023年7月4日止的26周內：
|
|
|
|
|
| 累積的 |
| |||||||||||||
額外的 | 其他 | |||||||||||||||||||
普通股 | 實收資本 | 留存收益 | 國庫 | 綜合 | ||||||||||||||||
股份 | 數量 | 資本 | 收益 | 股票 | （虧損）/收入 | 總費用 | ||||||||||||||
2023年1月3日餘額 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
淨收入 | — | — | — | | — | — | | |||||||||||||
外幣翻譯調整 | — | — | — | — | — | | | |||||||||||||
現金分紅聲明普通股，扣除被沒收的部分，$ | — | — | — | ( | — | — | ( | |||||||||||||
以股票爲基礎的報酬計劃 | | | | — | — | — | | |||||||||||||
公司回購股份 | — | — | — | — | ( | — | ( | |||||||||||||
2023年4月4日的餘額 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
淨收入 | — | — | — | | — | — | | |||||||||||||
外幣翻譯調整 | — | — | — | — | — | | | |||||||||||||
普通股股息宣佈，扣除沒收，$ | — | — | — | ( | — | — | ( | |||||||||||||
以股票爲基礎的報酬計劃 | | | | — | — | — | | |||||||||||||
公司財務帳戶購入國庫存貨，包括消費稅 | — | — | — | — | ( | — | ( | |||||||||||||
2023年7月4日餘額 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
「Rule 10b5-1交易安排」或「非Rule 10b5-1交易安排」，即根據S-k資料第408項規定定義的交易安排。
4
芝樂坊餐館公司股份有限公司
現金流量表簡明綜合報表
（以千爲單位）
(未經審計)
| 二十六 |
| 二十六 | |||
13個星期結束 | 13個星期結束 | |||||
| 2024年7月2日 |
| 2023年7月4日 | |||
經營活動現金流量： |
|
|
| |||
淨收入 | $ | $ | | |||
調整淨收益以使其與經營活動提供的現金流量相一致： | ||||||
折舊和攤銷費用 | | | ||||
資產減值和租約終止（收入）/費用 |
| |
| ( | ||
延遲所得稅 | | | ||||
以股票爲基礎的報酬計劃 |
| |
| | ||
支付遞延考慮和超過收購日公允價值的補償 | ( | — | ||||
資產和負債變動： | ||||||
應收賬款及其他應收款項 | | | ||||
所得稅應收/應付款 |
| ( |
| ( | ||
存貨 |
| ( |
| ( | ||
預付費用 |
| ( |
| ( | ||
經營租賃資產/負債 |
| ( |
| ( | ||
其他 | ( | ( | ||||
應付賬款 |
| |
| | ||
禮品卡負債 |
| ( |
| ( | ||
其他應計費用 | ( | | ||||
經營活動產生的現金流量 |
| |
| | ||
投資活動現金流量： | ||||||
固定資產的增加 |
| ( |
| ( | ||
無形資產的增加 |
| ( |
| ( | ||
其他 | | ( | ||||
投資活動中使用的現金 |
| ( |
| ( | ||
籌集資金的現金流量： | ||||||
與收購相關的遞延考慮和補償 | — | ( | ||||
2021 |
| ( |
| ( | ||
公司回購股份 |
| ( |
| ( | ||
融資活動使用的現金 |
| ( |
| ( | ||
外幣翻譯調整 |
| ( |
| | ||
現金及現金等價物淨變動額 | ( | ( | ||||
期初現金及現金等價物餘額 |
| |
| | ||
期末現金及現金等價物 | $ | | $ | | ||
補充披露： | ||||||
支付的利息 | $ | | $ | | ||
所得稅已付款項 | $ | | $ | | ||
施工應付款 | $ | | $ | | ||
「Rule 10b5-1交易安排」或「非Rule 10b5-1交易安排」，即根據S-k資料第408項規定定義的交易安排。
5
芝樂坊餐館公司股份有限公司
簡明合併財務報表附註
(未經審計)
1. 重要會計政策
報告範圍
附帶的簡明合併 基本報表 包括芝樂坊餐館股份有限公司及其全資子公司的帳戶（以下簡稱爲「公司」，「我們」，「我們」和「我們」）並依據美國通用會計準則（「GAAP」）編制。 所呈現期間的公司間帳戶和交易已在合併中予以消除。 這裏呈現的未經審計的財務報表包括在管理層意見中認爲對財務狀況、經營成果和現金流量的公允表述必要的所有重大調整（由常規重複調整組成）。 但是，這些結果不一定能反映出任何其他中期時段或整個財政年度可能實現的結果。 根據證券交易委員會（「SEC」）規則，未包括 一些通常包含在依據GAAP編制的財務報表中的信息和腳註披露。 附帶的簡明合併 基本報表 應與我們於2024年2月26日向SEC提交的關於截至2024年1月2日財政年度的年度報告在一塊閱讀 的合併財務報表和相關注釋。
我們利用以最接近12月31日的星期二結束的 52/53周財政年度進行財務報告。 2024財政年度共包括
使用估計
根據通用會計準則編制財務報表需要我們針對財務報表所涵蓋的報告期進行估計和假設。這些估計和假設會影響資產、負債、收入和支出的報告金額，以及對可能負有的有條件負債的披露。實際結果可能會與這些估計有所不同。
地緣政治和其他宏觀經濟影響我們的經營環境
從2021年開始，我們的運營結果受地緣政治和其他宏觀經濟事件的影響，導致供應鏈挑戰和商品和工資膨脹顯著增加。儘管我們在許多領域看到了改善，但其中一些因素繼續影響我們在2024財政年度的運營結果，導致商品和其他成本顯着增加。我們還因准入許可和房東準備延遲，以及供應鏈挑戰，而遇到了新餐廳開業延遲的情況。
地緣政治和宏觀經濟事件的持續影響可能導致消費者行爲、工資膨脹、人員配置挑戰、產品和服務成本膨脹、供應鏈中斷以及新餐廳開業延遲的進一步變化。氣候變化可能進一步惡化這些因素。有關我們業務與地緣政治和宏觀經濟事件相關的風險的更多信息，請參閱我們2024年1月2日結束的財政年度10-K表格「風險因素」中的內容。
最近的會計聲明
2023年11月，財務會計準則委員會（「FASB」）發佈了會計準則更新（「ASU」）2023-07號，分部報告（主題280）：改進報告性分部披露，通過對重要分部費用進行增強披露來更新報告性分部披露要求。修正案將於2023年12月15日後開始的財政年度生效，並應於2024年12月15日後開始的財政年度內的中期期間生效。允許提前採納。修訂案應當對財務報表中呈現的所有以往期間進行追溯。管理層目前正在評估這一ASU，以判斷其對我們披露的影響。
6
2023年12月，FASb發佈了ASU 2023-09《所得稅（主題740）：改進所得稅披露》，更新了與利潤調解相關的所得稅披露，並要求披露按司法管轄區域支付的所得稅。修正案還提供了更進一步的披露可比性。修正案將於2024年12月15日後開始的財政年度生效。允許提前採用。修正案應按前瞻性應用。但也允許追溯應用。管理層目前正在評估此ASU，以判斷其對我們披露的影響。
2. 公允值度量
公允值度量是根據評估技術和分類爲以下內容的輸入估算的：
| ● | 一級：同一資產或負債的活躍市場報價 |
| ● | 2級：在活躍市場中，除了相同的資產和負債的報價價格外，還有其他可觀察的輸入 |
| ● | 3級：不可觀察的輸入，在其中幾乎沒有市場活動存在，因此需要我們開發自己的假設 |
以下表格展示了我們資產和負債的組成部分和分類，這些資產和負債是根據定期基準價值衡量的（以千爲單位）：
| 2024年7月2日 | ||||||||
| 一級 |
| 二級 |
| 三級 | ||||
資產/(負債) |
| ||||||||
不符合資格的遞延薪酬資產 | $ | | $ | — | $ | — | |||
不符合資格的遞延薪酬負債 | ( | — | — | ||||||
收購相關的待定考量和補償責任 | — | — | ( | ||||||
| 2024年1月2日 | ||||||||
| 一級 |
| 二級 |
| 三級 | ||||
資產/(負債) | |||||||||
非合格的推遲支付資產 | $ | | $ | — | $ | — | |||
不符合條件的遞延支付責任 | ( | — | — | ||||||
與收購相關的待定對價和補償責任 | — | — | ( | ||||||
下表顯示了收購相關的待定條件考慮和作爲第3級別（以千爲單位）分類的補償責任的公允價值起始金額和結束金額的對賬。
| 二十六 |
| 二十六 | |||
13個星期結束 | 13個星期結束 | |||||
| 2024年7月2日 |
| 市場爲基礎的授予的公平價值 | |||
期初餘額 | $ | | $ | | ||
適用於拖欠餘額的合格住宅客戶的分期付款安排長達12個月。先支付欠款金額的定金，然後通過分期支付剩餘金額，加上常規月度賬單。 | ( | ( | ||||
公允價值變動 |
| |
| | ||
期末餘額 | $ | | $ | | ||
利用蒙特卡洛模型，根據預估的未來收入、利潤和波動性等變量和估計值判斷收購相關的待償條件和補償責任的公允價值，並沒有最低或最高支付額。截至2024年7月2日，使用蒙特卡洛模型的未貼現結果區間用於判斷收購相關的待償條件和補償責任的公允價值爲 $
由於短期性質，我們的現金及現金等價物、應收賬款及其他應收賬款、應收所得稅、預付費用、應付賬款、應交所得稅、及其他應計負債的公允價值約等於其賬面價值。
7
截至2024年7月2日，我們擁有 $
3. 庫存
存貨包括(以千計):
| 2024年7月2日 |
| 2024年1月2日 | |||
餐廳食品和用品 | $ | | $ | | ||
麪包店成品和在製品 (1) |
| |
| | ||
麪包店原材料和供應品 |
| |
| | ||
總 | $ | | $ | | ||
(1) | 麪包店成品和生產中存貨的增加主要是由於存貨週轉週期的增加，以提高我們的供應韌性。 |
4. 禮品卡
以下表格提供了與禮品卡相關的信息（以千爲單位）：
| 十三 | 十三 | 二十六 | 二十六 | ||||||||
13個星期結束 | 13個星期結束 | 13個星期結束 | 13個星期結束 | |||||||||
2024年7月2日 |
| 2023年7月4日 |
| 2024年7月2日 |
| 2023年7月4日 | ||||||
禮品卡責任： | ||||||||||||
期初餘額 |
| $ | |
| $ | | $ | |
| $ | | |
激活 |
| |
| |
| |
| | ||||
贖回和作廢 |
| ( |
| ( |
| ( |
| ( | ||||
期末餘額 |
| $ | |
| $ | | $ | |
| $ | | |
| 十三 | 十三 | 二十六 | 二十六 | ||||||||
13個星期結束 | 13個星期結束 | 13個星期結束 | 13個星期結束 | |||||||||
| 2024年7月2日 |
| 2023年7月4日 |
| 2024年7月2日 |
| 2023年7月4日 | |||||
禮品卡合同資產: | ||||||||||||
期初餘額 |
| $ | |
| $ | | $ | |
| $ | | |
Deferrals |
| |
| |
| |
| | ||||
攤銷 |
| ( |
| ( |
| ( |
| ( | ||||
期末餘額 |
| $ | |
| $ | | $ | |
| $ | | |
5. 開多期債務
循環授信設施
On October 6, 2022, we entered into a Fourth Amended and Restated Loan Agreement (the 「Loan Agreement」 and the revolving credit facility provided thereunder, the 「Revolver Facility」). The Loan Agreement amends and restates in its entirety our prior credit agreement. The Revolver Facility, which terminates on October 6, 2027, provides us with revolving loan commitments that total $
As of July 2, 2024, we had net availability for borrowings of $
8
根據可用額度，我們在每個財政季度的最後一天受以下財務契約約束：(i)資產調整後的淨債務與EBITDAR的最高比率(「修訂後的淨調整槓桿比率」)爲
貸款協議下的借款根據公司的選擇，計息利率爲：(i)調整後的期限SOFR之和(在貸款協議中定義爲「期限SOFR利率」)加上(B)基於修訂後的淨調整槓桿比率的變量利率，範圍從
We are also subject to customary events of default that, if triggered, could result in acceleration of the maturity of the Revolver Facility. Subject to certain exceptions, the Revolver Facility also limits distributions with respect to our equity interests, such as cash dividends and share repurchases, based on a defined ratio, and sets forth negative covenants that restrict indebtedness, liens, investments, sales of assets, fundamental changes and other matters.
可轉換資本性債券
On June 15, 2021, we issued $
這些票據是優先的、無擔保的債務，(i)在支付權利上與我們現有和未來的優先、無擔保債務平等；(ii)在支付權利上優先於我們現有和未來的明確次級於票據的債務；(iii)在價值與擔保該債務的抵押品相等的情況下，有效次級於我們現有和未來的擔保債務；(iv)在結構上次級於所有現有和未來的債務和其他負債，包括應付賬款，以及我們子公司的優先股權(在我們不是其持有者的情況下)。這些票據是根據我們和受託人(「受託人」)之間於2021年6月15日簽署的信託契約(「基礎契約」)發行並受其管理，截至2021年6月15日簽署的首要補充契約(「補充契約」，和基礎契約，經補充契約後稱爲「契約」)，公司與受託人之間。
Robert W. Leasure, Jr.
9
票據可在2024年6月20日或之後以及到期日前的第30個預定交易日當天或之前，隨時按我們的選擇全部或部分（受如下所述的某些限制）進行兌換，現金贖回價格等於待贖回票據的本金加上應計和未付利息（如果有），但不包括贖回日，但僅限於贖回日如果我們上次報告的普通股每股銷售價格超過
如果發生構成 「基本變革」（定義見契約）的某些公司事件，那麼，除某些現金合併的有限例外情況外，票據持有人可能會要求我們在基本變更回購日之前以現金回購價格回購票據，外加應計和未付利息（如果有），以現金回購價格回購票據。基本變革的定義包括涉及我們的某些業務合併交易以及與普通股相關的某些除名事件。
這些票據有與 「違約事件」（定義見契約）的發生有關的習慣條款，其中包括以下內容：（i）票據的某些付款違約（如果票據利息支付違約，則將受以下約束）
如果發生涉及我們（而不僅僅是我們的重要子公司）的破產、破產或重組事件的違約事件，則當時未償還的所有票據的本金以及所有應計和未付利息將立即到期並支付，無需任何人採取任何進一步行動或通知。如果任何其他違約事件發生並仍在繼續，則受託人通過通知我們，或至少是
截至2024年7月2日，該票據的本金餘額總額爲美元
10
6. 租賃合同
租賃費用的組成如下（以千爲單位）：
| 十三 |
| 十三 | 二十六 | 二十六 | |||||||
| 2024年7月2日 |
| 2023年7月4日 |
| 2024年7月2日 |
| 2023年7月4日 | |||||
運營 | $ | | $ | | $ | | $ | | ||||
變量 |
| |
| | | | ||||||
長期（2） |
| |
| | | | ||||||
總費用 | $ | | $ | | $ | | $ | | ||||
與租約相關的補充信息（以千爲單位）：
二十六 | 二十六 | |||||
周結束日期 | 週期結束 | |||||
| 2024年7月2日 |
| 2023年7月4日 | |||
支付與租賃負債計量相關的現金： | ||||||
經營租約的經營現金流量 | $ | | $ | | ||
新的資產租賃負債所獲得的租賃權資產 | | | ||||
7. 承諾和附帶條件
在我們業務的正常過程中，我們會受到私人訴訟、政府審計和調查、行政訴訟和其他索賠的影響。這些事項通常涉及客戶、員工和其他與餐飲行業常見運營和僱傭問題相關的索賠。在任何特定時間可能存在多項這類索賠，其中一些可能被作爲集體訴訟提出。我們偶爾也會涉及侵犯或挑戰我們在國內外註冊商標和其他知識產權的訴訟。我們可能會受到不良宣傳和訴訟費用的影響，這些費用是由於此類指控而產生的，無論這些指控是否屬實或我們是否在法律上被認定有責任。
目前，我們相信由於最終解決任何未決訴訟、審計、調查、訴訟和索賠所產生的可能損失數量不會對我們的財務狀況、經營業績或流動性產生單獨或合計重大不利影響。然而，我們未來某個季度或財政年度的經營業績可能會受到與訴訟、審計、訴訟或索賠相關的情況變化的影響。與此類索賠相關的法律費用將在發生時支付。
8. 股東權益
普通股 – 分紅和股票分割
2024年6月4日，Realty Income公司（以下簡稱「公司」）發佈了一份新聞稿，公佈了截至2024年12月31日更新的收益和投資成交量預測。新聞稿的副本作爲Exhibit 99.1附在此，作爲本報告的一部分。此報告的Exhibit 99.1作爲第7.01項目，根據8-K表格的規定提供，不視爲1934年證券交易法第18條的「報告文件」，無論此後公司做出的任何註冊文件，也不管任何這類文件的一般包含語言，都不作爲參考依據。
根據董事會授權，我們可以回購高達 元件
11
我們的股票回購計劃沒有到期日期，也不要求我們購買特定數量的股票，並且可以隨時進行修改、暫停或終止。股票回購可能會在公開市場購買、私下協商的交易、加速股票回購計劃、公司自行認購要約或其他方式的情況下不時進行。未來決定回購股票的權利屬於董事會，取決於多個因素，包括目前和預期的經營現金流量、與新餐廳開發和現有位置維護相關的資本需求、股利支付、債務水平和借款成本、與FRC收購協議相關的義務、我們的股價和當前市場條件。回購股份的時間和數量也受限於根據貸款協議制定的法律約束和契約，這些法律約束和契約限制根據定義的比率進行股票回購。 （有關我們長期債務的討論，請參見注5。）
9. 股權激勵
我們制定了股權激勵計劃，其中可以授予員工、顧問和非僱員董事激勵股票期權、非合格股票期權、股票增值權益、受限股票和受限股份單位。
十三 | 十三 | 二十六 | 二十六 | |||||||||
13個星期結束 | 13個星期結束 | 13個星期結束 | 13個星期結束 | |||||||||
| 2024年7月2日 |
| 市場爲基礎的授予的公平價值 |
| 2024年7月2日 |
| 2023年7月4日 | |||||
勞動成本 | $ | | $ | $ | | $ | | |||||
其他營運成本和費用 |
| |
| |
| |
| | ||||
總務及行政管理費用 |
| |
| |
| |
| | ||||
股權報酬總額 |
| |
| |
| |
| | ||||
所得稅收益 |
| |
| |
| |
| | ||||
股權激勵支出總額，減稅後 | $ | | $ | | $ | | $ | | ||||
股權激勵中的大寫股票補償(1) | $ | | $ | | $ | | $ | | ||||
| (1) | 我們的政策是資本化股權激勵成本的部分，用於我們的內部開發部門，涉及可資本化活動，如設計和施工新餐廳，改造現有地點和設備安裝。資本化的股權激勵費用包含在資產和設備淨額中，列入合併資產負債表。 |
股票期權
我們在2024財年第二季度和2023財年未發行任何期權。截至2024年7月2日結束的26周內的期權活動如下：
加權授予日期公允價值的平均數 | ||||||||||
平均數 | ||||||||||
加權授予日期公允價值的平均數 | 剩餘 | |||||||||
平均數 | 加權 | 總計 | ||||||||
| 股份 |
| 行權價格 |
| 術語 |
| 內在價值(1) | |||
（以千爲單位) | (每股) | （年） | （以千爲單位) | |||||||
截至2024年1月2日未行權股票單位數爲 | | $ | | $ | | |||||
已行權 |
| | | |||||||
行使 |
| — | — | |||||||
被剝奪或取消的 |
| ( | | |||||||
截至2024年7月2日未行權股票單位數爲 | | $ | | $ | | |||||
2024年7月2日可以行使 |
| | $ | | $ | | ||||
| (1) | 聚合內在價值是根據我們在財政期末的收盤股價與行權價之間的差額計算得出的，再乘以虛值期權的數量，代表着在財政期末日期行權的所有期權持有人未稅金額。 |
12
截至2023年7月31日，續借貸款協議下未償還的借款額爲
受限股份和受限股份單位
2024年7月2日結束的26周內，受限股份和受限股份單位的活動如下：
加權授予日期公允價值的平均數 | |||||
平均數 | |||||
| 股份 |
| 公正價值 | ||
（以千爲單位) | (每股) | ||||
截至2024年1月2日未行權股票單位數爲 |
| | $ | | |
已行權 |
| | | ||
34,105 |
| ( | | ||
被取消 |
| ( | | ||
截至2024年7月2日未行權股票單位數爲 |
| | $ | | |
受限股份和受限股份單位的公允價值基於授予日的收盤股價。2024財年第二季度和2023財年發行的受限股份和受限股份單位的加權平均公允價值分別爲$
10. 每股淨收益
基本每股淨利潤是通過將淨利潤除以期間內流通的未歸屬限制性股份獎勵減少的普通股加權平均數而計算的。截至2024年7月2日和2023年7月4日
稀釋後的每股淨利潤是通過將淨利潤除以期間內未實現的共同股等權重平均數計算得出的。 有關說明的普通股等效權益是通過採用如換股法來確定，而截至日期的期權、受限股票和受限股票單位的普通股等效權益是通過採用庫存股法確定的。
十三 | 十三 | 二十六 | 二十六 | |||||||||
13個星期結束 | 13個星期結束 | 13個星期結束 | 13個星期結束 | |||||||||
| 2024年7月2日 |
| 2023年7月4日 |
| 2024年7月2日 |
| 2023年7月4日 | |||||
(以千爲單位，除每股數據外) | ||||||||||||
淨收入 | $ | | $ | |
| $ | | $ | | |||
基本平均流通股數 | | |
| | | |||||||
股權獎勵的稀釋效應 (1) | | | | | ||||||||
攤薄加權平均股份數 | | | | | ||||||||
基本每股淨收益 | $ | | $ | | $ | | $ | | ||||
攤薄每股淨收益 | $ | | $ | | $ | | $ | | ||||
| (1) | 與未行使的期權、限制性股票和限制性股票單位相關的普通股等價物的股份 |
13
11. 分部信息
我們的經營分部是管理層爲了決策目的而審閱離散財務信息的業務，包括芝樂坊餐館、North Italia、Flower Child、其他FRC品牌和我們的麪包店部門。根據會計準則法典（"ASC"）280，分部報告，芝樂坊餐館、North Italia和其他FRC品牌是唯一符合報告性經營分部標準的業務。其餘經營分部（Flower Child和我們的麪包店部門）以及不符合經營分部條件的業務合併爲其他。未分配的公司費用、資本支出和資產也合併在其他中。
以下是分部信息（以千爲單位）：
十三 | 十三 | 二十六 | 二十六 | |||||||||
13個星期結束 | 13個星期結束 | 13個星期結束 | 13個星期結束 | |||||||||
| 2024年7月2日 |
| 2023年7月4日 |
| 2024年7月2日 |
| 2023年7月4日 | |||||
營收： | ||||||||||||
芝樂坊餐館 | $ | | $ | | $ | | $ | | ||||
North Italia | | | | | ||||||||
其他FRC | | | | | ||||||||
其他 |
| |
| |
| |
| | ||||
總費用 | $ | | $ | | $ | | $ | | ||||
營業收入： | ||||||||||||
芝樂坊餐館餐廳 | $ | | $ | | $ | | $ | | ||||
北意大利 | | | | | ||||||||
其他FRC | | | | | ||||||||
其他 |
| ( |
| ( |
| ( |
| ( | ||||
總費用 | $ | | $ | | $ | | $ | | ||||
折舊和攤銷費用： | ||||||||||||
芝樂坊餐館 | $ | | $ | | $ | | $ | | ||||
North Italia | | | | | ||||||||
其他FRC | | | | | ||||||||
其他 |
| |
| |
| |
| | ||||
總費用 | $ | | $ | | $ | | $ | | ||||
資產減值和租賃終止（收入）/費用： | ||||||||||||
芝樂坊餐館 | $ | | $ | | $ | | $ | | ||||
North Italia | — | — | — | — | ||||||||
其他 FRC | — | — | — | | ||||||||
其他 | ( | ( | ( | | ||||||||
總費用 | $ | ( | $ | ( | $ | | $ | | ||||
預開支: | ||||||||||||
芝樂坊餐館 | $ | | $ | | $ | | $ | | ||||
North Italia | | | | | ||||||||
其他FRC | | | | | ||||||||
其他 | | | | | ||||||||
總費用 | $ | | $ | | $ | | $ | | ||||
我們已經確定了財務報告內部控制的重大缺陷。重大缺陷是指財務報告內部控制的缺陷或多個缺陷，導致公司年度或中期財務報表可能存在重大錯誤的合理可能性，並且不會及時被預防或檢測到。 | ||||||||||||
芝樂坊餐館 | $ | | $ | | $ | | $ | | ||||
北意大利 | | | | | ||||||||
其他FRC | | | | | ||||||||
其他 | | | | | ||||||||
總費用 | $ | | $ | | $ | | $ | | ||||
14
| July 2, 2024 |
| January 2, 2024 | |||
Total assets: | ||||||
The Cheesecake Factory restaurants | $ | | $ | | ||
North Italia | | | ||||
Other FRC |
| |
| | ||
Other |
| |
| | ||
Total | $ | | $ | | ||
12. Subsequent Events
On
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
Certain information included in this Form 10-Q and other materials we have filed or may file with the Securities and Exchange Commission (“SEC”), as well as information included in oral or written statements made by us or on our behalf, may contain forward-looking statements about our current and presently expected performance trends, growth plans, business goals and other matters.
These statements may be contained in our filings with the SEC, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (together with the Securities Act, the “Acts”). This includes, without limitation, statements regarding corporate social responsibility (“CSR”) and in our CSR report, the effects of geopolitical and macroeconomic factors on our financial condition and our results of operations, financial guidance and projections, as well as expectations of our future financial condition, results of operations, sales, target growth rates, cash flows, quarterly dividends, share repurchases, corporate strategy , potential price increases, plans, targets, goals, objectives, performance, growth potential, competitive position and business, and statements regarding our ability to: leverage our competitive strengths, including developing and investing in new restaurant concepts and expanding The Cheesecake Factory® brand to other retail opportunities; maintain our aggregate sales volumes; deliver comparable sales growth; provide a differentiated experience to customers; outperform the casual dining industry and increase our market share; leverage sales increases and manage flow through; manage cost pressures, including, increasing wage rates and insurance costs, and increase margins; grow earnings; remain relevant to consumers; attract and retain qualified management and other staff; increase shareholder value; find suitable sites and manage increasing construction costs; profitably expand our concepts domestically and in Canada, and work with our licensees to expand The Cheesecake Factory internationally; support the growth of North Italia, Flower Child and Other FRC restaurants; and utilize our capital effectively. These forward-looking statements may be affected by various factors including: economic, public health and political conditions that impact consumer confidence and spending, including rising interest rates, periods of heightened inflation and market instability, and armed conflicts; supply chain disruptions; demonstrations, political unrest, potential damage to or closure of our restaurants and potential reputational damage to us or any of our brands; pandemics and related containment measures, including the potential for quarantines or restriction on in-person dining; acceptance and success of The Cheesecake Factory in international markets; acceptance and success of North Italia, Flower Child and Other FRC concepts; the risks of doing business abroad through Company-owned restaurants and/or licensees; foreign exchange rates, tariffs and cross border taxation; changes in unemployment rates; increases in minimum wages and benefit costs; the economic health of our landlords and other tenants in retail centers in which our restaurants are located, and our ability to successfully manage our lease arrangements with landlords; the economic health of suppliers, licensees, vendors and other third parties providing goods or services to us; the timing of our new unit development and related permitting; compliance with debt covenants; strategic capital allocation decisions including with respect to share repurchases or dividends; the ability to achieve projected financial results; the resolution of uncertain tax positions with the Internal Revenue Service and the impact of tax reform legislation; changes in laws impacting our business; adverse weather conditions in regions in which our restaurants are located; factors that are under the control of government agencies, landlords and other third parties; the risks, costs and uncertainties associated with opening new restaurants; and other risks and uncertainties detailed from time to time in our filings with the SEC. Such forward-looking statements include all other statements that are not historical facts, as well as statements that are preceded by, followed by or that include words or phrases such as “believe,” “plan,” “will likely result,” “expect,” “intend,” “will continue,” “is anticipated,” “estimate,” “project,” “may,” “could,” “would,” “should” and similar expressions. These statements are based on our current expectations and involve risks and uncertainties which may cause results to differ materially from those set forth in such statements.
In connection with the “safe harbor” provisions of the Acts, we have identified and are disclosing important factors, risks and uncertainties that could cause our actual results to differ materially from those projected in forward-looking statements made by us, or on our behalf. (See Part II, Item 1A of this report, “Risk Factors,” and Part I, Item 1A, “Risk Factors,” included in our Annual Report on Form 10-K for the fiscal year ended January 2, 2024.) These cautionary statements are to be used as a reference in connection with any forward-looking statements. The factors, risks and uncertainties identified in these cautionary statements are in addition to those contained in any other cautionary statements, written or oral, which may be made or otherwise addressed in connection with a forward-looking statement or contained in any of our subsequent filings with the SEC. Because of these factors, risks and uncertainties, we caution against placing undue reliance on forward-looking statements. Although we believe that the assumptions underlying forward-looking statements are currently reasonable, any of the assumptions could be incorrect or incomplete, and there
16
can be no assurance that forward-looking statements will prove to be accurate. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by law.
The below discussion and analysis, which contains forward-looking statements, should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes in Part I, Item 1 of this report and with the following items included in our Annual Report on Form 10-K for the fiscal year ended January 2, 2024: the audited consolidated financial statements and related notes in Part IV, Item 15; “Risk Factors” included in Part I, Item 1A; “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7; and the cautionary statements included throughout this Form 10-Q. The inclusion of supplementary analytical and related information herein may require us to make estimates and assumptions to enable us to fairly present, in all material respects, our analysis of trends and expectations with respect to our results of operations and financial position.
Geopolitical and Other Macroeconomic Impacts to our Operating Environment
Beginning in 2021, our operating results were impacted by geopolitical and other macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation. While we have seen improvements in many of these areas, some of these factors continue to impact our operating results in fiscal 2024, contributing to significantly increased commodity and other costs. We have also encountered delays in opening new restaurants primarily due to delays in permitting and landlord readiness, as well as supply chain challenges.
The ongoing impact of geopolitical and macroeconomic events could lead to further shifts in consumer behavior, wage inflation, staffing challenges, product and services cost inflation, disruptions in the supply chain and delay in new restaurant openings. Climate change may further exacerbate a number of these factors. For more information regarding the risks to our business relating to the geopolitical and macroeconomic events, see “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 2, 2024.
General
The Cheesecake Factory Incorporated is a leader in experiential dining. We are culinary forward and relentlessly focused on hospitality. We currently own and operate 340 restaurants throughout the United States and Canada under brands including The Cheesecake Factory® (216 locations), North Italia® (39 locations), Flower Child® (33 locations) and additional brands within our FRC portfolio (44 locations). Internationally, 34 The Cheesecake Factory® restaurants operate under licensing agreements. Our bakery division operates two facilities that produce quality cheesecakes and other baked products for our restaurants, international licensees and third-party bakery customers.
Overview
Our strategy is driven by our commitment to customer satisfaction and is focused primarily on menu innovation, service and operational execution to continue to differentiate ourselves from other restaurant concepts, as well as to drive competitively strong performance that is sustainable. Financially, we are focused on prudently managing expenses at our restaurants, bakery facilities and corporate support center, and leveraging our size to make the best use of our purchasing power.
Investing in new Company-owned restaurant development is our top long-term capital allocation priority, with a focus on opening our concepts in premier locations within both new and existing markets. We plan to continue expanding The Cheesecake Factory and North Italia concepts, and in addition, our FRC subsidiary serves as an incubation engine,innovating new food, dining and hospitality experiences to create fresh, exciting concepts.
Our overall revenue growth is primarily driven by revenues from new restaurant openings and increases in comparable restaurant sales.
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For The Cheesecake Factory concept, our strategy is to increase comparable restaurant sales by growing average check and maintaining customer traffic through (1) continuing to offer innovative, high quality menu items that offer customers a wide range of options in terms of flavor, price and value, (2) focusing on service and hospitality with the goal of delivering an exceptional customer experience and (3) continuing to provide our customers with convenient options for off-premise dining. We are continuing our efforts on a number of initiatives, including menu innovation, a greater focus on increasing customer throughput in our restaurants, leveraging our gift card program, working with a third party to provide delivery services for our restaurants, increasing customer awareness of our online ordering capabilities, improving the pick-up experience, augmenting our marketing programs, including our Cheesecake RewardsTM program, enhancing our training programs and leveraging our customer satisfaction measurement platform.
Average check variations are driven by menu price increases and/or changes in menu mix. We generally update The Cheesecake Factory menus twice each year, and our philosophy is to use price increases to help offset key operating cost increases in a manner that balances supporting both our margin objectives and customer traffic levels, utilizing a market-based strategy to help mitigate cost pressure in higher-wage geographies. Prior to fiscal 2022, we targeted menu price increases of approximately 2% to 3% annually. Beginning in 2022, we have implemented menu price increases above our historical levels to help offset significant inflationary cost pressures. Current and future near-term pricing actions may also be at levels above historical norms to keep pace with any significant cost increases. In addition, on a regular basis, we carefully consider opportunities to adjust our menu offerings or ingredients to help manage product availability and cost.
Margins are subject to fluctuations in commodity costs, labor, restaurant-level occupancy expenses, general and administrative (“G&A”) expenses and preopening expenses. Our objective is to recapture our pre-COVID-19 pandemic margins and longer-term to drive margin expansion, by leveraging incremental sales to increase restaurant-level margins at The Cheesecake Factory concept, leveraging our bakery operations, international and consumer packaged goods royalty revenue streams and G&A expense over time, and optimizing our restaurant portfolio.
We plan to employ a balanced capital allocation strategy comprised of investing in new restaurants that are expected to meet our targeted returns, repaying borrowings under our Revolving Facility and returning capital to shareholders through our dividend and share repurchase programs, the latter of which offsets dilution from our equity compensation program and supports our earnings per share growth. Future decisions to pay or to increase or decrease dividends or to repurchase shares are at the discretion of the Board and will be dependent on a number of factors, including limitations pursuant to the terms and conditions of the Loan Agreement and applicable law.
Longer-term, we believe our domestic revenue growth (comprised of our targeted annual unit growth of 7%, in aggregate across concepts, and comparable sales growth), combined with margin expansion, planned debt repayments and an anticipated capital return program will support our long-term financial objective of 13% to 14% total return to shareholders, on average. We define our total return as earnings per share growth plus our dividend yield.
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Results of Operations
The following table presents, for the periods indicated, information from our condensed consolidated statements of income expressed as percentages of revenues. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any other interim period or for the full fiscal year.
| Thirteen |
| Thirteen |
| Twenty-Six |
| Twenty-Six | ||
Weeks Ended | Weeks Ended |
| Weeks Ended | Weeks Ended | |||||
July 2, 2024 | July 4, 2023 | July 2, 2024 | July 4, 2023 | ||||||
Revenues |
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Costs and expenses: |
|
| |||||||
Food and beverage costs | 22.3 | 23.2 | 22.6 |
| 23.5 | ||||
Labor expenses | 35.1 |
| 35.3 | 35.5 |
| 35.7 | |||
Other operating costs and expenses | 26.4 |
| 26.2 | 26.3 |
| 26.4 | |||
General and administrative expenses | 6.0 |
| 6.4 | 6.4 |
| 6.3 | |||
Depreciation and amortization expenses | 2.8 |
| 2.7 | 2.8 |
| 2.7 | |||
Impairment of assets and lease termination (income)/expenses | 0.0 | (0.1) | 0.1 | 0.1 | |||||
Acquisition-related contingent consideration, compensation and amortization expenses | 0.1 | 0.1 | 0.1 | 0.1 | |||||
Preopening costs | 0.8 |
| 0.7 | 0.7 |
| 0.5 | |||
Total costs and expenses | 93.5 |
| 94.5 | 94.5 |
| 95.3 | |||
Income from operations | 6.5 |
| 5.5 |
| 5.5 | 4.7 | |||
Interest and other expense, net | (0.3) |
| (0.3) | (0.3) |
| (0.2) | |||
Income before income taxes | 6.2 |
| 5.2 | 5.2 |
| 4.5 | |||
Income tax provision | 0.4 |
| 0.3 | 0.4 |
| 0.4 | |||
Net income | 5.8 | % | 4.9 | % | 4.8 | % | 4.1 | % |
Thirteen Weeks Ended July 2, 2024 Compared to Thirteen Weeks Ended July 4, 2023
Revenues
Revenues increased 4.4% to $904.0 million for the fiscal quarter ended July 2, 2024 compared to $866.2 million for the comparable prior year period, primarily due to additional revenue related to new restaurant openings and an increase in comparable restaurant sales.
The Cheesecake Factory sales increased 3.7% to $676.7 million for the second quarter of fiscal 2024 compared to $652.5 million for the second quarter of fiscal 2023. Average sales per restaurant operating week increased 1.0% to $240,989 in the second quarter of fiscal 2024 from $238,654 in the second quarter of fiscal 2023. Total operating weeks at The Cheesecake Factory restaurants increased 2.7% to 2,808 in the second quarter of fiscal 2024 compared to 2,734 in the prior year. The Cheesecake Factory comparable sales increased by 1.4%, or $9.2 million, from the second quarter of fiscal 2023. The increase from fiscal 2023 was primarily driven by an increase in average check of 1.6% (based on an increase of 4.5% in menu pricing and 2.9% negative impact from mix), partially offset by decreased customer traffic of 0.2%. We implemented effective menu price increases of approximately 2.5% and 2.0% in the first quarter of fiscal 2024 and the third quarter of fiscal 2023, respectively. We are in the process of implementing approximately a 1.9% price increase in the third quarter of fiscal 2024. Sales through the off-premise channel comprised approximately 21% of our restaurant sales during the second quarter of fiscal 2024 as compared to 22% in the second quarter of fiscal 2023. We account for each off-premise order as one customer for traffic measurement purposes. Therefore, average check is generally higher for off-premise orders as most are for more than one customer.
North Italia sales increased 14.6% to $75.5 million for the second quarter of fiscal 2024, compared to $65.9 million for the second quarter of fiscal 2023. Average sales per restaurant operating week decreased 1.5% to $151,330 in the second quarter of fiscal 2024 from $153,692 in the second quarter of fiscal 2023. Total operating weeks at North Italia increased 16.3% to 499 in the second quarter of fiscal 2024 compared to 429 in the prior year. North Italia comparable sales increased approximately 2% from the second quarter of fiscal 2023. The increase from fiscal 2023 was primarily driven by an increase in average check of 3% (based on an increase of 6.5% in menu pricing, partially offset by a 3.5% negative impact from mix), partially offset by decreased customer traffic
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of 1%. We implemented effective menu price increases of approximately 2.2% and 3.7% in the second quarter of fiscal 2024 and the fourth quarter of fiscal 2023, respectively.
Flower Child sales increased 6.6% to $35.7 million for the second quarter of fiscal 2024, compared to $33.5 million for the second quarter of fiscal 2023. Flower Child sales per restaurant operating week was $85,867 in the second quarter of fiscal 2024 as compared to $85,863 in the second quarter of fiscal 2023. Total operating weeks at Flower Child increased 6.7% to 416 in the second quarter of fiscal 2024 compared to 390 in the prior year.
Other FRC sales increased 12.0% to $73.6 million for the second quarter of fiscal 2024, compared to $65.7 million for the second quarter of fiscal 2023. Other FRC average sales per restaurant operating week decreased 5.7% to $134,131 in the second quarter of fiscal 2024 from $142,270 in the second quarter of fiscal 2023. Average sales per restaurant operating week were impacted by new restaurant openings, as well as the concept mix and a decline in comparable sales. Total operating weeks at Other FRC increased 18.8% to 549 in the second quarter of fiscal 2024 compared to 462 in the prior year.
Restaurants become eligible to enter the comparable sales base in their 19th month of operation. As of July 2, 2024, there were six The Cheesecake Factory restaurants and six North Italia restaurants not yet in the comparable sales base. International licensed locations and restaurants that are no longer in operation, including those which we have relocated, are excluded from comparable sales calculations.
Food and Beverage Costs
Food and beverage costs consist of raw materials and ingredients used in the food and beverage products sold in our restaurants and to our third-party customers. As a percentage of revenues, food and beverage costs were 22.3% and 23.2% in the second quarters of fiscal 2024 and 2023, respectively, primarily due to menu price increases in excess of inflation across most categories (0.4%) and a shift in sales mix (0.4%).
Labor Expenses
As a percentage of revenues, labor expenses, which include restaurant-level labor costs and bakery production labor, including associated fringe benefits, were 35.1% and 35.3% in the second quarters of fiscal 2024 and 2023, respectively. This decrease is primarily driven by menu price increases in excess of wage rate inflation and improved productivity (0.4%), partially offset by an increase in management labor due to higher staffing levels (0.2%).
Other Operating Costs and Expenses
Other operating costs and expenses consist of all other restaurant-level operating costs, the major components of which are occupancy expenses (rent, common area expenses, insurance, licenses, taxes and utilities), dining room and to-go supplies, repairs and maintenance, janitorial expenses, credit card processing fees, marketing including delivery commissions, and incentive compensation, as well as bakery production overhead. As a percentage of revenues, other operating costs and expenses were 26.4% and 26.2% in the second quarters of fiscal 2024 and 2023, respectively. This variance was primarily driven by increased occupancy and building related costs (0.4%), partially offset by a shift in sales mix (0.2%).
G&A Expenses
G&A expenses consist of the restaurant management recruiting and training program, restaurant field supervision, corporate support and bakery administrative organizations, as well as gift card commissions to third-party distributors. As a percentage of revenues, G&A expenses were 6.0% and 6.4% in the second quarter of fiscal 2024 and 2023, respectively. This variance was primarily due to lower legal fees (0.2%).
Impairment of Assets and Lease Termination (Income)/Expenses
During the second quarter of fiscal 2024, we recorded impairment of assets and lease terminations income of $0.2 million primarily related to lease termination income for one Flower Child location. During the second quarter of fiscal 2023, we recorded impairment of assets and lease terminations income of $0.7 million primarily related to lease termination income for one Grand Lux Cafe location.
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Preopening Costs
Preopening costs were $7.0 million and $6.0 million in the second quarters of fiscal 2024 and 2023, respectively. We opened one The Cheesecake Factory, one North Italia, two Flower Child and one Other FRC locations in the second quarter of fiscal 2024 compared to one The Cheesecake Factory and two Other FRC locations in the second quarter of fiscal 2023. Restaurant-level preopening costs include all costs to relocate and compensate restaurant management staff members during the preopening period, costs to recruit and train hourly restaurant staff members, and wages, travel and lodging costs for our opening training team and other support staff members. Also included in preopening costs are expenses for maintaining a roster of trained managers for pending openings, the associated temporary housing and other costs necessary to relocate managers in alignment with future restaurant opening and operating needs. Preopening costs can fluctuate significantly from period to period based on the number, mix and timing of restaurant openings and the specific preopening costs incurred for each restaurant.
Income Tax Provision
Our effective income tax rate was 6.9% and 5.8% for the second quarters of fiscal 2024 and 2023, respectively. The increase was primarily due to a lower proportion of employment credits in relation to income before income taxes (3.0%) in the second quarter of fiscal 2024 and a lower proportion of non-taxable gains on our investments in variable life insurance contracts used to support our non-qualified deferred compensation plan in relation to income before income taxes (0.3%) in the second quarter of fiscal 2024. These factors were partially offset by a change to our reserve for uncertain tax positions (1.6%) and a lower proportion of state taxes expense in relation to income before taxes in the second quarter of fiscal 2024 (0.5%).
Twenty-Six Weeks Ended July 2, 2024 Compared to Twenty-Six Weeks Ended July 4, 2023
Revenues
Revenues increased 3.6% to $1,795.3 million for the first six months ended July 2, 2024 compared to $1,732.3 million for the comparable prior year period, primarily due to additional revenue related to new restaurant openings and an increase in comparable restaurant sales.
The Cheesecake Factory sales increased 2.8% to $1,344.5 million for the first six months of fiscal 2024 compared to $1,308.5 million for the first six months of fiscal 2023. Average sales per restaurant operating week increased 0.1% to $239,446 in the first six months of fiscal 2024 from $239,167 in the first six months of fiscal 2023. Total operating weeks at The Cheesecake Factory restaurants increased 2.6% to 5,615 in the first six months of fiscal 2024 compared to 5,471 in the prior year. The Cheesecake Factory comparable sales increased by 0.4%, or $5.3 million, from the first six months of fiscal 2023. The increase from fiscal 2023 was primarily driven by an increase in average check of 1.3% (based on an increase of 4.8% in menu pricing and 3.5% negative impact from mix), partially offset by decreased customer traffic of 0.9%. Sales through the off-premise channel comprised approximately 21% of our restaurant sales during the first six months of fiscal 2024 as compared to 22% in the first six months of fiscal 2023.
North Italia sales increased 13.3% to $146.4 million for the first six months of fiscal 2024, compared to $129.2 million for the first six months of fiscal 2023. Average sales per restaurant operating week decreased 0.7% to $149,528 in the first six months of fiscal 2024 from $150,626 in the first six months of fiscal 2023. Total operating weeks at North Italia increased 14.1% to 979 in the first six months of fiscal 2024 compared to 858 in the prior year. North Italia comparable sales increased approximately 3% from the first six months of fiscal 2023. The increase from fiscal 2023 was primarily driven by an increase in average check of 4% (based on an increase of 7% in menu pricing, partially offset by a 3% negative impact from mix), partially offset by decreased customer traffic of 1%.
Flower Child sales increased 8.3% to $70.2 million for the first six months of fiscal 2024, compared to $64.8 million for the first six months of fiscal 2023. Flower Child sales per restaurant operating week increased 3.7% to $84,775 in first six months of fiscal 2024 from $81,711 in the first six months of fiscal 2023. Total operating weeks at Flower Child increased 4.4% to 828 in the first six months of fiscal 2024 compared to 793 in the prior year.
Other FRC sales increased 10.0% to $147.9 million for the first six months of fiscal 2024, compared to $134.4 million for the first six months of fiscal 2023. Other FRC average sales per restaurant operating week decreased 6.9% to $137,040 in the first six months of fiscal 2024 from $147,172 in the first six months of fiscal 2023. Average sales per restaurant operating week were impacted
21
by new restaurant openings, as well as the concept mix and a decline in comparable sales. Total operating weeks at Other FRC increased 18.2% to 1,079 in the first six months of fiscal 2024 compared to 913 in the prior year.
Food and Beverage Costs
As a percentage of revenues, food and beverage costs were 22.6% and 23.5% in the first six months of fiscal 2024 and 2023, respectively, primarily due to menu price increases in excess of inflation across most categories (0.5%) and a shift in sales mix (0.3%).
Labor Expenses
As a percentage of revenues, labor expenses were 35.5% and 35.7% in the first six months of fiscal 2024 and 2023, respectively. This decrease is primarily due to menu price increases in excess of wage rate inflation (0.3%), partially offset by increased management labor due to improved staffing levels (0.2%).
Other Operating Costs and Expenses
As a percentage of revenues, other operating costs and expenses were 26.3% and 26.4% in the first six months of fiscal 2024 and 2023, respectively. This variance was primarily driven by a shift in sales mix (0.2%), partially offset by increased restaurant-level incentive compensation expense (0.1%).
G&A Expenses
As a percentage of revenues, G&A expenses were 6.4% and 6.3% in the first six months of fiscal 2024 and 2023, respectively. This variance was primarily due to increased labor expense (0.1%).
Impairment of Assets and Lease Termination (Income)/Expenses
During the first six months of fiscal 2024, we recorded impairment of assets and lease terminations expense of $1.9 million primarily related to impairment of assets for one The Cheesecake Factory location and lease termination costs for one The Cheesecake Factory and one Flower Child location. During the first six months of fiscal 2023, we recorded impairment of assets and lease terminations expense of $1.6 million primarily related to lease termination costs for one Grand Lux Cafe location.
Preopening Costs
Preopening costs were $12.9 million and $9.1 million in the first six months of fiscal 2024 and 2023, respectively. We opened one The Cheesecake Factory, three North Italia, three Flower Child and three Other FRC locations in the first half of fiscal 2024 compared to one The Cheesecake Factory, one Flower Child and three Other FRC locations in the first half of fiscal 2023.
Income Tax Provision
Our effective income tax rate was 8.8% and 8.6% for the first six months of fiscal 2024 and 2023, respectively. The increase was primarily due to a lower proportion of employment credits in relation to income before income taxes (1.7%) in the first six months of fiscal 2024 and a higher proportion of tax shortfall related to equity compensation in relation to income before income taxes in the first six months of fiscal 2024 (0.5%). These factors were partially offset by a change to our reserve for uncertain tax positions (1.6%) and a lower proportion of state taxes expense in relation to income before taxes (0.2%).
Non-GAAP Measures
Adjusted net income and adjusted diluted net income per share are supplemental measures of our performance that are not required by or presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly-titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. We calculate these non-GAAP measures by eliminating from net income and diluted net income per share the impact of items we do not consider indicative of our ongoing operations. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our inclusion of these adjusted measures
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should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. In the future, we may incur expenses or generate income similar to the adjusted items.
23
Following is a reconciliation from net income and diluted net income per share to the corresponding adjusted measures (in thousands, except per share data):
| Thirteen |
| Thirteen |
| Twenty-Six |
| Twenty-Six | |||||
Weeks Ended | Weeks Ended | Weeks Ended | Weeks Ended | |||||||||
| July 2, 2024 |
| July 4, 2023 |
| July 2, 2024 |
| July 4, 2023 | |||||
Net income | $ | 52,444 | $ | 42,675 | $ | 85,635 | $ | 70,725 | ||||
Impairment of assets and lease termination (income)/expenses | (188) | (653) | 1,895 | 1,589 | ||||||||
Acquisition-related contingent consideration, compensation and amortization expenses | 1,146 | 1,287 | 2,267 | 2,476 | ||||||||
Tax effect of adjustments (1) |
| (249) |
| (165) |
| (1,082) |
| (1,057) | ||||
Adjusted net income | $ | 53,153 | $ | 43,144 | $ | 88,715 | $ | 73,733 | ||||
Diluted net income per share | $ | 1.08 | $ | 0.87 | $ | 1.76 | $ | 1.43 | ||||
Impairment of assets and lease termination (income)/expenses | (0.00) | (0.01) | 0.04 | 0.03 | ||||||||
Acquisition-related contingent consideration, compensation and amortization expenses | 0.02 | 0.03 | 0.05 | 0.05 | ||||||||
Tax effect of adjustments (1) |
| (0.01) |
| (0.00) |
| (0.02) |
| (0.02) | ||||
Adjusted diluted net income per share (2) | $ | 1.09 | $ | 0.88 | $ | 1.82 | $ | 1.50 | ||||
| (1) | Based on the federal statutory rate and an estimated blended state tax rate, the tax effect on all adjustments assumes a 26% tax rate. |
| (2) | Adjusted net income per share may not add due to rounding. |
Fiscal 2024 Outlook
Based on recent trends and assuming no material operating or consumer disruptions, we anticipate total revenue for fiscal 2024 to be approximately $3.56 billion to $3.60 billion.
During fiscal 2024, we currently estimate total inflation across our commodities, total labor (factoring in the latest trends in wage rates and channel mix, as well as in other components such as payroll taxes and benefits) and other operating costs and expenses to be in the low to mid-single digit range. However, there remains measurable risk associated with cost fluctuations driven by the current environment. We estimate G&A expenses to be slightly higher than fiscal 2023 as a percent of sales and preopening costs of approximately $28 million. Based on these factors, we expect fiscal 2024 net income margin of approximately 4.3% to 4.4% based on the estimated revenue range provided.
We plan to open as many as 22 new restaurants in fiscal 2024, including as many as three The Cheesecake Factory restaurants, six to seven North Italia restaurants, six to seven Flower Child locations and seven to eight restaurants within our Other FRC business. We anticipate approximately $180 to $200 million in cash capital expenditures to support this level of unit development, as well as required maintenance on our restaurants. Restaurant opening dates may be impacted by supply chain challenges and permit approval delays.
Total revenues for the third quarter of fiscal 2024 are expected to be between $855 million and $870 million. We anticipate commodity inflation to be in the low-single digit range and expect labor inflation to be in the mid-single digit range. Based on these factors, we expect third quarter fiscal 2024 net income margin of 2.6% to 3.0% based on the estimated revenue range provided.
24
Liquidity and Capital Resources
Our corporate financial objectives are to maintain a sufficiently strong and conservative balance sheet to support our operating initiatives and unit growth while maintaining financial flexibility to provide the financial resources necessary to protect and enhance the competitiveness of our restaurant and bakery brands and to provide a prudent level of financial capacity to manage the risks and uncertainties of conducting our business operations under various economic and industry cycles. Typically, cash flows generated from operating activities are our principal source of liquidity, which we use to finance our restaurant expansion plans, ongoing maintenance of our restaurants and bakery facilities and investment in our corporate and information technology infrastructures.
Similar to many restaurant and retail chain store operations, we utilize operating lease arrangements for all of our restaurant locations. Accordingly, our lease arrangements reduce, to some extent, our capacity to utilize funded indebtedness in our capital structure. We are not limited to the use of lease arrangements as our only method of opening new restaurants. However, we believe our operating lease arrangements continue to provide appropriate leverage for our capital structure in a financially efficient manner.
During the first six months of fiscal 2024, our cash and cash equivalents decreased by $15.6 million to $40.7 million. The following table presents, for the periods indicated, a summary of our key cash flows from operating, investing and financing activities (in millions):
Twenty-Six | Twenty-Six | |||||
Weeks Ended | Weeks Ended | |||||
| July 2, 2024 |
| July 4, 2023 | |||
Cash provided by operating activities | $ | 94.4 | $ | 101.5 | ||
Additions to property and equipment | (66.3) | (62.7) | ||||
Acquisition-related deferred consideration and compensation | (6.5) | (13.0) | ||||
Common stock dividends paid | (26.7) | (27.0) | ||||
Treasury stock purchases, inclusive of excise tax | (16.4) | (21.7) | ||||
Cash Provided by Operating Activities
Cash flows from operations decreased by $7.1 million from the first six months of fiscal 2023 primarily due to an increase in inventory levels, timing of prepaid expenses and a payment of deferred consideration and compensation in excess of acquisition-date fair value, partially offset by higher net income. Typically, our requirement for working capital has not been significant since our restaurant customers pay for their food and beverage purchases in cash or cash equivalents at the time of sale, and we are able to sell many of our restaurant inventory items before payment is due to the suppliers of such items.
Property and Equipment
Capital expenditures for new restaurants, including locations under development, were $38.9 million and $37.8 million for the first six months of fiscal 2024 and 2023, respectively. Capital expenditures also included $24.8 million and $22.0 million for our existing restaurants and $2.6 million and $2.9 million for bakery and corporate capacity and infrastructure investments in the first six months of fiscal 2024 and 2023, respectively.
We opened ten restaurants in the first six months of fiscal 2024 comprised of one The Cheesecake Factory, three North Italia, three Flower Child and three Other FRC locations compared to one The Cheesecake Factory, one Flower Child and three Other FRC location in the first six months of fiscal 2023. We expect to open as many as 22 new restaurants in fiscal 2024 across our portfolio of concepts. We anticipate approximately $180 to $200 million in capital expenditures to support this level of unit development, as well as required maintenance on our restaurants.
Acquisition-Related Deferred Consideration and Compensation
During the first six months of fiscal 2024 and 2023, we made payments of $6.5 million and $13.0 million, respectively, for contingent consideration and compensation related to the FRC acquisition.
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Convertible Senior Notes
On June 15, 2021, we issued $345.0 million in aggregate principal amount of convertible senior notes (“Notes”), which will mature on June 15, 2026, unless earlier repurchased, redeemed or converted. The net proceeds from the sale of the Notes were approximately $334.9 million after deducting issuance costs related to the Notes. As of July 2, 2024, the conversion rate for the Notes was 13.6938 shares of common stock per $1,000 principal amount of the Notes, which represents a conversion price of approximately $73.03 per share of common stock. In connection with the cash dividend that was declared by our Board on July 25, 2024, on August 13, 2024 we will adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the Notes in accordance with the terms. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion of the Notes.)
Credit Facility
On October 6, 2022, we entered into a Fourth Amended and Restated Loan Agreement (the “Loan Agreement” and the revolving credit facility provided thereunder, the “Revolver Facility”). The Loan Agreement amends and restates in its entirety our prior credit agreement. The Revolver Facility, which terminates on October 6, 2027, provides us with revolving loan commitments that total $400 million, of which $50 million may be used for issuances of letters of credit. The Revolver Facility contains a commitment increase feature that, subject to certain conditions precedent, could provide for an additional $200 million in revolving loan commitments. Our obligations under the Revolver Facility are unsecured. Certain of our material subsidiaries have guaranteed our obligations under the Revolver Facility. As of July 2, 2024, we had net availability for borrowings of $236.5 million, based on a $130.0 million outstanding debt balance and $33.5 million in standby letters of credit under the Revolver Facility.
Under the Revolver Facility, we are subject to financial covenants, as well as to customary events of default that, if triggered, could result in acceleration of the maturity of the Revolver Facility. Subject to certain exceptions, the Revolver Facility also limits distributions with respect to our equity interests, such as cash dividends and share repurchases, based on a defined ratio, and sets forth negative covenants that restrict indebtedness, liens, investments, sales of assets, fundamental changes and other matters. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion of our long-term debt.)
Common Stock Dividends
Common stock dividends of $26.7 million and $27.0 million were paid in the first six months of fiscal 2024 and 2023, respectively. As further discussed in Note 12 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report, in July 2024, our Board declared a quarterly dividend to be paid in August 2024. Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements, limitations on cash distributions pursuant to the terms and conditions of the Loan Agreement and applicable law, and other such factors that the Board considers relevant.
Share Repurchases
Under authorization by our Board to repurchase up to 61.0 million shares of our common stock, we have cumulatively repurchased 57.0 million shares at a total cost of $1,828.1 million, excluding excise tax through July 2, 2024. We repurchased 0.5 million shares at a cost of $16.4 million, excluding excise tax during the first six months of fiscal 2024 compared to 0.6 million shares at a cost of $21.7 million, excluding excise tax during the comparable fiscal 2023 period.
Our objectives with regard to share repurchases have been to offset the dilution to our shares outstanding that results from equity compensation grants and to supplement our earnings per share growth. Our share repurchase program does not have an expiration date, does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time. Future decisions to repurchase shares are at the discretion of the Board and are based on several factors, including current and forecasted operating cash flows, capital needs associated with new restaurant development and maintenance of existing locations, dividend payments, debt levels and cost of borrowing, obligations associated with the FRC acquisition, our share price and current market conditions. The timing and number of shares repurchased are also subject to legal constraints and financial covenants under our Loan Agreement that limit share repurchases based on a defined ratio. (See Note 8 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion of our repurchase authorization.)
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Cash Flow Outlook
We believe that our cash and cash equivalents, combined with expected cash flows provided by operations and available borrowings under the Revolving Facility, will provide us with adequate liquidity for the next 12 months and the foreseeable future.
As of July 2, 2024, we had no financing transactions, arrangements or other relationships with any unconsolidated entities or related parties. Additionally, we had no financing arrangements involving synthetic leases or trading activities involving commodity contracts.
Critical Accounting Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ from these estimates. Our critical accounting estimates have not changed materially from those previously reported in our Annual Report on Form 10-K for the fiscal year ended January 2, 2024.
Recent Accounting Pronouncements
See Note 1 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for a summary of new accounting standards.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The following discussion of market risks contains forward-looking statements and should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes in Part I, Item 1 of this report and with the following items in our Annual Report on Form 10-K for the fiscal year ended January 2, 2024: the audited consolidated financial statements and related notes in Part IV, Item 15; the “Risk Factors” in Part I, Item 1A; the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7; and the cautionary statements included throughout the report. Actual results may differ materially from the following discussion based on general conditions in the commodity and financial markets.
The cost of products and services used in our operations is subject to volatility due to the relative availability of labor and distribution, weather, natural disasters, inventory levels and other supply and/or demand impacting events such as geopolitical events, economic conditions or other unforeseen circumstances. Climate change may further exacerbate a number of these factors. Beginning in fiscal 2021, our operating results were impacted by geopolitical and other macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation. While we have seen improvements in many of these areas, some of these factors continue to impact our operating results in fiscal 2024, contributing to significantly increased commodity and other costs.
We attempt to negotiate short-term and long-term agreements for some of our principal commodity, supply and equipment requirements, such as certain dairy products and poultry, depending on market conditions and expected demand. While we are in the process of contracting for certain key food and non-food supplies for fiscal 2024, these efforts may not be successful or yield our intended benefits. We continue to evaluate the possibility of entering into similar arrangements for other commodities and periodically evaluate hedging vehicles, such as direct financial instruments, to assist us in managing risk and variability associated with such commodities. As of July 2, 2024, we had no hedging contracts in place.
Commodities for which we have not entered into contracts can be subject to unforeseen supply and cost fluctuations, which at times may be significant. Additionally, the cost of commodities subject to governmental regulation, such as dairy and corn, can be especially susceptible to price fluctuation. Goods we purchase on the international market may be subject to even greater fluctuations in cost and availability, which could result from a variety of factors, including the value of the U.S. dollar relative to other currencies, international trade disputes, tariffs, geopolitical unrest and varying global demand. We may not have the ability to increase menu prices or vary menu items in response to food commodity price increases. For both the second quarter of fiscal 2024 and 2023, a hypothetical increase of 1% in food costs would have negatively impacted cost of sales by $2.0 million.
We are exposed to market risk from interest rate changes on our funded debt. This exposure relates to the component of the interest rate on our Loan Agreement that is indexed to market rates. Based on outstanding borrowings at both July 2, 2024 and January 2, 2024, a hypothetical 1% rise in interest rates would have increased interest expense by $1.3 million, on an annual basis. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion of our long-term debt.)
We are also subject to market risk related to our investments in variable life insurance contracts used to support our non-qualified plans to the extent these investments are not equivalent to the related liability. In addition, because changes in these investments are not taxable, gains and losses result in tax benefit and tax expense, respectively, and directly affect net income through the income tax provision. Based on balances at July 2, 2024 and January 2, 2024, a hypothetical 10% decline in the market value of our deferred compensation asset and related liability would not have impacted income before income taxes. However, under such a scenario, net income would have declined by $2.5 million and $2.4 million at July 2, 2024 and January 2, 2024, respectively.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We have established and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only a reasonable assurance of achieving the desired control objectives, and management was necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We carried out an evaluation, under the supervision and with the participation of our
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management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of July 2, 2024.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended July 2, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
See Note 7 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report.
Item 1A. Risk Factors.
A description of the risk factors associated with our business is contained in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended January 2, 2024 (“Annual Report”). These cautionary statements are to be used as a reference in connection with any forward-looking statements. The factors, risks and uncertainties identified in these cautionary statements are in addition to those contained in any other cautionary statements, written or oral, which may be made or otherwise addressed in connection with a forward-looking statement or contained in any of our subsequent filings with the SEC.
Except as set forth below, there have been no material changes in our risk factors since the filing of our Annual Report.
If any of our third-party vendors experiences a failure that affects a significant aspect of our business, we may experience data loss, increased costs, operational disruption or other harm, any of which could materially adversely affect our financial performance.
In order to leverage our internal resources and information technology infrastructure, and to support our business continuity and disaster recovery planning efforts, we rely on third-party vendors to provide some of our essential business processes. For example, we rely on a network of third-party distribution warehouses to deliver ingredients and other materials to our restaurants. In some instances, these processes rely on technology and may be outsourced to the vendor in their entirety and in other instances we utilize these vendors’ externally-hosted business applications. Our vendors’ systems have experienced cybersecurity incidents, including credential stuffing attacks in which compromised user credentials were used to breach the systems, and are vulnerable to a variety of risks, including, without limitation, theft, casualties such as fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external cybersecurity threats, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as malfeasance by insiders, human or technological error, malicious code embedded in open-source software, or misconfigurations, “bugs” or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) network infrastructure, products or services, security breaches, denial of service attacks, viruses, worms, malware, ransomware, social engineering/phishing, breaches of the algorithms used to encrypt and protect data and other malicious, or disruptive or unauthorized events that jeopardize the confidentiality, integrity or availability of information systems or information residing therein, including confidential information and personal information (each, a “Cybersecurity Incident” and collectively, “Cybersecurity Incidents”). For example, in July 2024, we experienced disruptions to our information technology systems as part of the CrowdStrike software update that resulted in global information technology outages, including disruptions to our ability to process customer payments at certain of our restaurants. While we experienced this disruption for a limited period of time, the incident did not have a significant impact on our business. We also rely on third party services to effectively operate our restaurants including, for example, gift card distribution and transaction processing services, point-of-sale system services, online ordering services and food delivery services, and our Cheesecake RewardsTM program. We derive substantial revenue from these aspects of our business, which could suffer in the event of any factor that adversely impacts our vendors’ ability to provide such services. Such factors include, without limitation, loss of, or significant change in contractual terms of, key vendor contracts, vendor or processor failures, technology failures, changes in applicable laws or regulations, Security
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Incidents, damage to the reputation of any key vendor and mandated employment relationships between companies that facilitate third-party delivery services and their service personnel. (See the risk factor titled “Changes in, or any failure to comply with, applicable laws or regulations could materially adversely affect our ability to operate our restaurants and/or increase our cost to do so, which could materially adversely affect our financial performance” in Item 1A of our Annual Report on Form 10-K for fiscal year ended January 2, 2024.)
We continue to review options to expand the use of third-party providers in other areas. Our general practice is to seek to work with service providers that are leading performers in their industries and with technology vendors that we understand employ up-to-date and appropriate data security practices and internal control practices. However, we cannot guarantee that failures will not occur. The failure of third-party vendors to provide adequate services, including, as result of any Security Incident, or to generally fail to employ up-to-date and appropriate data security and internal control practices, could significantly harm our operations and reputation, which could materially adversely affect our financial performance.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table presents our purchases of our common stock during the fiscal quarter ended July 2, 2024 (in thousands, except per share data):
|
|
| Total Number of |
| Maximum Number | ||||
Shares Purchased | of Shares that May | ||||||||
Total Number | as Part of Publicly | Yet be Purchased | |||||||
of Shares | Average Price | Announced Plans | Under the Plans or | ||||||
Period |
| Purchased (1) |
| Paid per Share (2) |
| or Programs |
| Programs | |
April 3 — May 7, 2024 |
| 87 | $ | 34.38 |
| 86 |
| 4,006 | |
May 8 — June 4, 2024 |
| 24 |
| 36.04 |
| 15 |
| 3,982 | |
June 5 — July 2, 2024 |
| — |
| — |
| — |
| 3,982 | |
Total |
| 111 |
|
|
| 101 |
|
| |
| (1) | The total number of shares purchased include 10,224 shares withheld upon vesting of restricted share awards to satisfy tax withholding obligations. |
(2) | The dollar value of shares repurchased excludes excise tax due under the Inflation Reduction Act of 2022. |
Under authorization by our Board to repurchase up to 61.0 million shares of our common stock, we have cumulatively repurchased 57.0 million shares at a total cost of $1,828.1 million, excluding excise tax, through July 2, 2024 with 0.1 million shares repurchased at a cost of $3.9 million, excluding excise tax during the second quarter of fiscal 2024. Our share repurchase program does not have an expiration date, does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time. The timing and number of shares repurchased are subject to legal constraints and financial covenants under our Loan Agreement that limit share repurchases based on a defined ratio. (See Note 8 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion of our repurchase authorization.)
Item 5. Other information.
During the fiscal quarter ended July 2, 2024, no director or officer of the Company
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Item 6. Exhibits
Exhibit |
| Item |
| Form |
| File Number |
| Incorporated by |
| Filed/ |
|---|---|---|---|---|---|---|---|---|---|---|
3.1 | Restated Certificate of Incorporation of The Cheesecake Factory Incorporated | 8-K | 000-20574 | 3.1 | 6/4/24 | |||||
3.2 | Certificate of Designations of The Cheesecake Factory Incorporated, dated April 20, 2020 | 8-K | 000-20574 | 3.1 | 4/20/20 | |||||
3.3 | Bylaws of The Cheesecake Factory Incorporated, amended and restated on October 26, 2022 | 8-K | 000-20574 | 3.1 | 11/1/22 | |||||
31.1 | Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer | — | — | — | Filed herewith | |||||
31.2 |
| Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer | — | — | — | Filed herewith | ||||
32.1 |
| — | — | — | Furnished herewith | |||||
32.2 |
| — | — | — | Furnished herewith | |||||
101.1 |
| The following materials from The Cheesecake Factory Incorporated’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2024, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of income, (iii) condensed consolidated statements of comprehensive income, (iv) condensed consolidated statement of stockholders’ equity, (v) condensed consolidated statements of cash flows, and (vi) the notes to the condensed consolidated financial statements |
| — | — | — | Filed herewith | |||
104.1 | The cover page of The Cheesecake Factory Incorporated’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2024, formatted in iXBRL (included with Exhibit 101.1) | — | — | — | Filed herewith |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 5, 2024 | THE CHEESECAKE FACTORY INCORPORATED | |
By: | /s/ DAVID OVERTON | |
David Overton | ||
Chairman of the Board and Chief Executive Officer | ||
(Principal Executive Officer) | ||
By: | /s/ MATTHEW E. CLARK | |
Matthew E. Clark | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
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