What changed in this filing

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Item 1. Financial Statements

2023-11-03 compared with 2023-08-17 · 102 added, 113 removed, 358 unchanged (38% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for per share amounts) July 9, 2023 December 25, 2022

(in thousands, except for per share amounts) October 1, 2023 December 25, 2022

Current assets:

11 unchanged sentences

Total assets $ 777,314 $ 832,145

Liabilities and stockholders ' equity:

Liabilities and stockholders ' equity (deficit):

Current liabilities:

12 unchanged sentences

Commitments and Contingencies)

Stockholders ' equity:

Stockholders ' equity (deficit):

Common stock;

2 unchanged sentences

20,449 shares issued;

15,931 and 15,934 shares outstanding as of July 9, 2023 and December 25, 2022

15,482 and 15,934 shares outstanding as of October 1, 2023 and December 25, 2022

Preferred stock, $ 0.001 par value:

3,000 shares authorized;

no shares issued and outstanding as of July 9, 2023 and December 25, 2022

Treasury stock 4,518 and 4,515 shares, at cost, as of July 9, 2023 and December 25, 2022

no shares issued and outstanding as of October 1, 2023 and December 25, 2022

Treasury stock 4,967 and 4,515 shares, at cost, as of October 1, 2023 and December 25, 2022

( 176,813 ) ( 182,810 )

2 unchanged sentences

Accumulated deficit ( 61,685 ) ( 54,190 )

Total stockholders' equity 3,026 1,789

Total liabilities and stockholders ' equity

Total stockholders' equity (deficit) ( 8,743 ) 1,789

Total liabilities and stockholders ' equity (deficit)

$ 777,314 $ 832,145

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Twelve Weeks Ended Twenty-Eight Weeks Ended

(in thousands, except for per share amounts) July 9, 2023 July 10, 2022 July 9, 2023 July 10, 2022

Twelve Weeks Ended Forty Weeks Ended

(in thousands, except for per share amounts) October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Restaurant revenue $ 273,133 $ 282,415 $ 973,307 $ 951,633

15 unchanged sentences

Interest expense, net and other 5,945 4,590 19,541 16,151

Income (loss) before income taxes 4,078 ( 17,532 ) 840 ( 21,051 )

Loss before income taxes ( 7,883 ) ( 12,693 ) ( 7,043 ) ( 33,745 )

Income tax provision (benefit) 278 ( 43 ) 453 453

Net income (loss) $ 3,922 $ ( 17,966 ) $ 664 $ ( 21,547 )

Earnings (loss) per share:

Net loss $ ( 8,161 ) $ ( 12,650 ) $ ( 7,496 ) $ ( 34,198 )

Loss per share:

Basic $ ( 0.52 ) $ ( 0.80 ) $ ( 0.47 ) $ ( 2.16 )

6 unchanged sentences

Other comprehensive income (loss), net of tax ( 12 ) ( 45 ) 1 ( 51 )

Total comprehensive income (loss) $ 3,926 $ ( 17,984 ) $ 675 $ ( 21,554 )

Total comprehensive loss $ ( 8,173 ) $ ( 12,695 ) $ ( 7,495 ) $ ( 34,249 )

See Notes to Condensed Consolidated Financial Statements.

RED ROBIN GOURMET BURGERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ' EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ' EQUITY (DEFICIT)

Common Stock Treasury Stock Accumulated

6 unchanged sentences

Non-cash stock compensation — — — — 2,179 — — 2,179

Net income (loss) — — — — — — ( 3,256 ) ( 3,256 )

Net loss — — — — — — ( 3,256 ) ( 3,256 )

Other comprehensive income (loss), net of tax — — — — — 8 — 8

Balance, April 16, 2023 20,449 $ 20 4,386 $ ( 177,480 ) $ 235,876 $ ( 26 ) $ ( 57,445 ) $ 945

Issuance of common stock, $ 0.001 par value, net of stock issuance costs

— — — — — — — —

Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 250 ) 9,933 ( 8,297 ) — — 1,636

1 unchanged sentence

Non-cash stock compensation — — — — 1,519 — — 1,519

Net income (loss) — — — — — — 3,922 3,922

Net income — — — — — — 3,922 3,922

Other comprehensive income (loss), net of tax — — — — — 4 — 4

Balance, July 9, 2023 20,449 $ 20 4,518 $ ( 172,546 ) $ 229,098 $ ( 22 ) $ ( 53,524 ) $ 3,026

Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 31 ) 694 ( 809 ) — — ( 115 )

Acquisition of treasury stock — — 480 ( 4,961 ) — — — ( 4,961 )

Non-cash stock compensation — — — 1,480 — — 1,480

Net loss — — — — — — ( 8,161 ) ( 8,161 )

Other comprehensive income (loss), net of tax — — — — — ( 12 ) — ( 12 )

Balance, October 1, 2023 20,449 $ 20 4,967 $ ( 176,813 ) $ 229,769 $ ( 34 ) $ ( 61,685 ) $ ( 8,743 )

Common Stock Treasury Stock Accumulated

6 unchanged sentences

Non-cash stock compensation — — — — 3,042 — — 3,042

Net income (loss) — — — — — — ( 3,581 ) ( 3,581 )

Net loss — — — — — — ( 3,581 ) ( 3,581 )

Other comprehensive income (loss), net of tax — — — — — 11 — 11

2 unchanged sentences

Non-cash stock compensation — — — — 2,542 — — 2,542

Net income (loss) — — — — — — ( 17,966 ) ( 17,966 )

Net loss — — — — — — ( 17,966 ) ( 17,966 )

Other comprehensive income (loss), net of tax — — — — — ( 18 ) — ( 18 )

Balance, July 10, 2022 20,449 $ 20 4,550 $ ( 184,205 ) $ 239,607 $ ( 6 ) $ 3,146 $ 58,562

Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 1 ) 36 ( 40 ) — — ( 4 )

Non-cash stock compensation — — — — 2,668 — — 2,668

Net loss — — — — — — ( 12,650 ) ( 12,650 )

Other comprehensive income (loss), net of tax — — — — — ( 45 ) — ( 45 )

Balance, October 2, 2022 20,449 $ 20 4,549 $ ( 184,169 ) $ 242,235 $ ( 51 ) $ ( 9,504 ) $ 48,531

See Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Twenty-Eight Weeks Ended

(in thousands) July 9, 2023 July 10, 2022

Forty Weeks Ended

(in thousands) October 1, 2023 October 2, 2022

Cash flows from operating activities:

Net income (loss) $ 664 $ ( 21,547 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net loss $ ( 7,496 ) $ ( 34,198 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 52,253 58,924

3 unchanged sentences

Stock-based compensation expense 5,171 8,229

(Gain) loss on sale of property, plant, and equipment ( 14,803 ) —

Gain on sale of property, plant, and equipment ( 29,865 ) ( 9,204 )

Other, net 733 3,240

14 unchanged sentences

Acquisition of franchised restaurants ( 3,529 ) —

Net cash used in investing activities ( 98 ) ( 15,624 )

Net cash provided by (used in) investing activities 18,992 ( 18,297 )

Cash flows from financing activities:

20 unchanged sentences

Red Robin Gourmet Burgers, Inc., a Delaware corporation, together with its subsidiaries ("Red Robin" or the "Company"), primarily operates, franchises, and develops full-service restaurants in North America.

As of July 9, 2023, the Company owned and operated 418 restaurants located in 39 states.

As of October 1, 2023, the Company owned and operated 417 restaurants located in 39 states.

The Company also had 91 franchised full-service restaurants in 14 states and one Canadian province.

22 unchanged sentences

July 10, 2022 12

Third Quarter 2023

October 1, 2023 12

Third Quarter 2022

October 2, 2022 12

Current and Prior Fiscal Years:

7 unchanged sentences

Immaterial Restatement of Prior Period Financial Statements

Subsequent to the issuance of the Company's financial statements as of and for the sixteen weeks ended April 16, 2023, the Company discovered a multi-year error in its calculation and recognition of revenue related to gift cards, primarily related to breakage revenue that had been recognized for bonus and discounted gift cards for which no or discounted monetary consideration was received, which resulted in the Company overstating total revenues by $ 0.2 million for the sixteen weeks ended April 16, 2023, $ 1.1 million for the year ended December 25, 2022, and $ 0.5 million for the twenty-eight weeks ended July 10, 2022.

The period (rollover) impact of the error correction on net income (loss) for the year ended December 25, 2022 increased net loss by $ 1.1 million, and the cumulative impact of the error correction on unearned revenue was an increase of $ 3.6 million.

As previously disclosed in our Form 10-Q for the period ended July 9, 2023, the Company discovered a multi-year error in its calculation and recognition of revenue related to gift cards, primarily related to breakage revenue that had been recognized for bonus and discounted gift cards for which no or discounted monetary consideration was received, which resulted in the Company overstating total revenues by $ 0.1 million and $ 0.6 million for the twelve and forty weeks ended October 2, 2022.

Management has evaluated this misstatement and concluded it was not material to prior periods, individually or in the aggregate.

However, correcting the cumulative effect of the error in the twelve and twenty-eight weeks ended July 9, 2023 would have had a significant effect on the results of operations for such periods.

However, correcting the cumulative effect of the error in the twelve and forty weeks ended October 2, 2022 would have had a significant effect on the results of operations for such periods.

Therefore, the Company is correcting the relevant prior period Condensed Consolidated Financial Statements and related footnotes for this error for comparative purposes.

The Company will also correct previously reported financial information for such immaterial errors in future filings, as applicable (see "Part II, Item 5.

Other Information" below for additional information).

Additionally, comparative prior period amounts in the applicable Notes to the Condensed Consolidated Financial Statements have been restated.

The following tables reflect the effects of the correction on all affected line items of the Company's previously reported Condensed Consolidated Financial Statements presented in this Form 10-Q:

CORRECTED CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

December 25, 2022

(in thousands) As Previously Reported Adjustment As Corrected

Unearned revenue $ 43,358 $ 3,586 $ 46,944

Total current liabilities 216,627 3,586 220,213

Total liabilities 826,770 3,586 830,356

Accumulated deficit ( 50,604 ) ( 3,586 ) ( 54,190 )

Total stockholders' equity 5,375 ( 3,586 ) 1,789

CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited)

Twelve Weeks Ended July 10, 2022

Twenty-Eight Weeks Ended July 10, 2022

(in thousands, except per share amounts) As Previously Reported Adjustment As Corrected As Previously Reported Adjustment As Corrected

Twelve Weeks Ended October 2, 2022

Forty Weeks Ended October 2, 2022

(in thousands) As Previously Reported Adjustment As Corrected As Previously Reported Adjustment As Corrected

Restaurant revenue $ 282,449 $ ( 34 ) $ 282,415 $ 951,718 $ ( 85 ) $ 951,633

5 unchanged sentences

Total comprehensive loss ( 12,612 ) ( 83 ) ( 12,695 ) ( 33,656 ) ( 593 ) ( 34,249 )

CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ' EQUITY (unaudited)

Sixteen Weeks Ended April 16, 2023

(in thousands) Accumulated Deficit Total Shareholders' Equity

As Previously Reported

Balance, December 25, 2022 $ ( 50,604 ) $ 5,375

Net loss ( 3,100 ) ( 3,100 )

Balance, April 16, 2023 ( 53,704 ) 4,686

Balance, December 25, 2022 ( 3,586 ) ( 3,586 )

Net loss ( 156 ) ( 156 )

Balance, April 16, 2023 ( 3,741 ) ( 3,741 )

Balance, December 25, 2022 ( 54,190 ) 1,789

Net loss ( 3,256 ) ( 3,256 )

Balance, April 16, 2023 $ ( 57,445 ) $ 945

CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ' EQUITY (unaudited)

Twenty-Eight Weeks Ended July 10, 2022

OTHER NON-GAAP INFORMATION:

Adjusted EBITDA 3,960 ( 83 ) 3,877 43,900 ( 189 ) 43,711

CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ' EQUITY (DEFICIT) (unaudited)

Forty Weeks Ended October 2, 2022

(in thousands) Retained Earnings/(Accumulated Deficit) Total Shareholders' Equity

As Previously Reported

Balance, December 26, 2021 $ 27,196 $ 76,974

Net loss ( 3,105 ) ( 3,105 )

Balance, April 17, 2022 24,091 76,857

Balance, December 26, 2021 ( 2,503 ) ( 2,503 )

Net loss ( 476 ) ( 476 )

Balance, April 17, 2022 ( 2,979 ) ( 2,979 )

Balance, December 26, 2021 24,693 74,471

Net loss ( 3,581 ) ( 3,581 )

Balance, April 17, 2022 21,112 73,878

As Previously Reported

Balance, April 17, 2022 24,091 76,857

Net loss ( 17,932 ) ( 17,932 )

Balance, July 10, 2022 6,159 61,575

Balance, April 17, 2022 ( 2,979 ) ( 2,979 )

Net loss ( 12,567 ) ( 12,567 )

Balance, October 2, 2022 ( 6,408 ) 51,627

Balance, July 10, 2022 ( 3,013 ) ( 3,013 )

Balance, April 17, 2022 21,112 73,878

Net loss ( 83 ) ( 83 )

Balance, October 2, 2022 ( 3,096 ) ( 3,096 )

Balance, July 10, 2022 3,146 58,562

Net loss ( 12,650 ) ( 12,650 )

Balance, October 2, 2022 $ ( 9,504 ) $ 48,531

CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Twenty-Eight Weeks Ended July 10, 2022

Forty Weeks Ended October 2, 2022

(in thousands) As Previously Reported Adjustment As Corrected

Net income (loss) $ ( 21,037 ) $ ( 510 ) $ ( 21,547 )

Net loss $ ( 33,605 ) $ ( 593 ) $ ( 34,198 )

Gift card breakage ( 8,289 ) 508 ( 7,781 )

2 unchanged sentences

In the following table, revenue is disaggregated by type of good or service (in thousands):

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 9, 2023 July 10, 2022 July 9, 2023 July 10, 2022

Twelve Weeks Ended Forty Weeks Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Restaurant revenue $ 273,133 $ 282,415 $ 973,307 $ 951,633

5 unchanged sentences

Components of Unearned revenue in the accompanying Condensed Consolidated Balance Sheets are as follows (in thousands):

July 9, 2023 December 25, 2022

October 1, 2023 December 25, 2022

Unearned gift card revenue $ 20,583 $ 35,837

1 unchanged sentence

Revenue recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the redemption and breakage of gift cards that were included in the liability balance at the beginning of the fiscal year was as follows (in thousands):

Twenty-Eight Weeks Ended

July 9, 2023 July 10, 2022

Forty Weeks Ended

October 1, 2023 October 2, 2022

Gift card revenue $ 16,865 $ 21,222

The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in Occupancy on our Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) as follows (in thousands):

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 9, 2023 July 10, 2022 July 9, 2023 July 10, 2022

Twelve Weeks Ended Forty Weeks Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Operating lease cost $ 16,691 $ 15,793 $ 53,865 $ 53,904

5 unchanged sentences

Total $ 22,017 $ 20,295 $ 70,292 $ 70,289

Refer to Footnote 5, Other Charges (gains), net , for information regarding the sale-leaseback transaction during the twelve and twenty-eight weeks ended July 9, 2023.

Refer to Footnote 5, Other Charges (gains), net , for information regarding the sale-leaseback transaction during the twelve and forty weeks ended October 1, 2023.

Earnings (Loss) Per Share

3 unchanged sentences

Diluted earnings per share reflects the potential dilution that could occur if holders of options exercised their options into common stock.

As the Company was in a net income (loss) position for the twelve and twenty-eight weeks ended July 10, 2022, all potentially dilutive common shares are considered anti-dilutive.

As the Company was in a net loss position for both the twelve and forty weeks ended October 1, 2023 and October 2, 2022, all potentially dilutive common shares are considered anti-dilutive.

The Company uses the treasury stock method to calculate the effect of outstanding stock options and awards.

Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands):

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 9, 2023 July 10, 2022 July 9, 2023 July 10, 2022

Twelve Weeks Ended Forty Weeks Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Basic weighted average shares outstanding 15,799 15,892 15,949 15,816

4 unchanged sentences

Other charges (gains), net consisted of the following (in thousands):

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 9, 2023 July 10, 2022 July 9, 2023 July 10, 2022

Twelve Weeks Ended Forty Weeks Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Gain on sale leaseback, net of expenses

$ ( 14,883 ) $ — $ ( 29,413 ) $ —

Gain on sale of restaurant property

— ( 9,204 ) — ( 9,204 )

Litigation contingencies

6 unchanged sentences

4,800 2,187 7,187 13,048

277 — 1,366 —

Closed corporate office costs, net of sublease income 78 267 253 267

Other financing costs

— 1,022 — 1,392

COVID-19 related charges

Other charges (gains), net $ ( 5,878 ) $ ( 5,217 ) $ ( 6,726 ) $ 8,236

During the second quarter of 2023, the Company sold nine restaurant properties for total proceeds of $ 28.5 million in a sale-leaseback transaction that resulted in a gain, net of expenses of $ 14.6 million.

The net proceeds of $ 28.5 million are included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows for the twenty-eight weeks ended July 9, 2023.

Litigation contingencies during the twelve and twenty-eight weeks ended July 9, 2023 and July 10, 2022 represent reserves for various in progress legal matters.

Litigation contingencies during the twelve and twenty-eight weeks ended July 10, 2022 include the impact of cash proceeds received by the Company related to certain legal claims.

During the third quarter of 2023, the Company sold nine restaurant properties for total proceeds of $ 30.4 million in a sale-leaseback transaction that resulted in a gain, net of expenses of $ 14.9 million.

This was the second sale-leaseback transaction of the year with the first transaction occurring in the second quarter of 2023 for another nine restaurant properties.

The year-to-date net proceeds of $ 58.8 million from the sale of 18 restaurant properties are included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows for the forty weeks ended October 1, 2023.

During the second quarter of 2022 the Company closed on an agreement to sell a restaurant property that the Company owned and leased back on a short-term basis.

The Company collected initial net proceeds from the purchaser-lessor of $ 3.9 million, which represented a portion of the total consideration received from the sale.

During the third quarter of 2022, the Company received the remaining proceeds, upon which the lease terminated and the sale transaction was completed, and recognized a $ 9.2 million gain on the sale of the restaurant property.

The initial net proceeds of $ 3.9 million are included within cash flows from financing activities and the final proceeds received of $ 8.5 million are included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows for the forty weeks ended October 2, 2022.

Litigation contingencies during the twelve and forty weeks ended October 1, 2023 and October 2, 2022 represent reserves for various in progress legal matters.

Litigation contingencies during the forty weeks ended October 2, 2022 include the impact of cash proceeds received by the Company related to certain legal claims.

Restaurant closure costs (gains) include the ongoing restaurant operating costs of the Company-owned restaurants incurred for closed restaurants and closed restaurant lease termination gains or losses.

2 unchanged sentences

The Company incurred a cumulative total of $ 5.0 million related to these one-time termination benefits.

Approximately $ 2.1 million in one-time termination benefits was incurred and recorded in Other charges in the Consolidated Statements of Operations and Comprehensive Income (Loss) during the twenty-eight weeks ended July 9, 2023.

A reconciliation of our termination benefits liability, which is included in Accrued liabilities and other current liabilities in our Condensed Consolidated Balance Sheets is as follows:

3 unchanged sentences

Cash Payments ( 4,164 )

Balance as of July 9, 2023

The Company recognized non-cash impairment charges primarily related to restaurant assets at four Company-owned restaurants during the twelve and twenty-eight weeks ended July 9, 2023.

Additionally, the Company recognized non-cash impairment charges related to subleasing additional space at the Company's closed corporate office during the twenty-eight weeks ended July 9, 2023.

The Company recognized non-cash impairment charges related to restaurant assets at six and nine Company-owned restaurants for the twelve and twenty-eight weeks ended July 10, 2022, respectively.

Balance as of October 1, 2023

The Company recognized non-cash impairment charges primarily related to restaurant assets at eight and twelve Company-owned restaurants during the twelve and forty weeks ended October 1, 2023.

Additionally, the Company recognized non-cash impairment charges related to subleasing additional space at the Company's closed corporate office during the forty weeks ended October 1, 2023.

The Company recognized non-cash impairment charges related to restaurant assets at one and ten Company-owned restaurants for the twelve and forty weeks ended October 2, 2022, respectively.

Other primarily includes non-cash charges related to terminated capital projects and disposals, and certain insurance claim proceeds.

2 unchanged sentences

COVID-19 related charges include the costs of purchasing personal protective equipment for restaurant Team Members and Guests and emergency sick pay provided to restaurant Team Members related to the COVID-19 pandemic.

Borrowings as of July 9, 2023 and December 25, 2022 are summarized below (in thousands):

July 9, 2023 Variable

Borrowings as of October 1, 2023 and December 25, 2022 are summarized below (in thousands):

October 1, 2023 Variable

Interest Rate December 25, 2022 Variable

34 unchanged sentences

During the first quarter of 2022, the Company expensed approximately $ 1.7 million of deferred financing charges related to the extinguishment of the Prior Credit Agreement on March 4, 2022.

These charges were recorded to interest expense, net and other on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the twenty-eight weeks ended July 10, 2022.

These charges were recorded to interest expense, net and other on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the forty weeks ended October 2, 2022.

In association with the execution of the new Credit Agreement, the Company recognized $ 4.8 million of deferred financing charges, and $ 6.1 million of original issuance discount.

5 unchanged sentences

Fair market value of mutual funds is measured using level 1 inputs (quoted prices for identical assets in active markets).

The following tables present the Company's assets measured at fair value on a recurring basis included in Other assets, net on the accompanying Condensed Consolidated Balance Sheets as of July 9, 2023 and December 25, 2022 (in thousands):

July 9, 2023 Level 1 Level 2 Level 3

October 1, 2023 Level 1 Level 2 Level 3

Investments in rabbi trust $ 2,137 $ 2,137 $ — $ —

4 unchanged sentences

Other than as disclosed in Note 9.

Acquisition of Franchised Restaurants, as of July 9, 2023, the Company had no financial assets or liabilities that were measured using level 3 inputs.

Acquisition of Franchised Restaurants, as of October 1, 2023, the Company had no financial assets or liabilities that were measured using level 2 or 3 inputs.

The Company also had no non-financial assets or liabilities that were required to be measured on a recurring basis.

4 unchanged sentences

Other Charges (Gains), net.

We impaired long-lived restaurant assets with a carrying value (including right of use lease assets) of $ 11.4 million, recognizing an impairment expense of $ 1.7 million during the twelve and twenty-eight weeks ended July 9, 2023 related to the net book value of these long-lived restaurant assets.

We determined the fair value of these long-lived assets to be $ 9.7 million in the twelve and twenty-eight weeks ended July 9, 2023.

Additionally, we impaired long-lived assets at the Company's closed corporate office with a carrying value (including right of use lease assets) of $ 1.0 million, recognizing an impairment expense of $ 0.7 million during the twenty-eight weeks ended July 9, 2023, related to the net book value of these long-lived restaurant assets.

We determined the fair value of these long-lived assets to be $ 0.3 million in the twenty-eight weeks ended July 9, 2023.

We impaired long-lived restaurant assets with a carrying value (including right of use lease assets) of $ 15.3 million and $ 26.7 million during the twelve and forty weeks ended October 1, 2023, recognizing impairment expense of $ 4.8 million and $ 6.5 million, respectively, related to the net book value of these long-lived restaurant assets.

We determined the fair value of these long-lived assets to be $ 10.5 million and $ 20.2 million in the twelve and forty weeks ended October 1, 2023.

Additionally, we impaired long-lived assets at the Company's closed corporate office with a carrying value (including right of use lease assets) of $ 1.0 million, recognizing an impairment expense of $ 0.7 million during the forty weeks ended October 1, 2023, related to the net book value of these long-lived restaurant assets.

We determined the fair value of these long-lived assets to be $ 0.3 million in the forty weeks ended October 1, 2023.

The impairments were recorded as a result of quantitative impairment analyses.

1 unchanged sentence

The Company's liability under its credit facility is carried at historical cost in the accompanying Condensed Consolidated Balance Sheets.

As of July 9, 2023, the fair value of the credit facility was approximately $ 196.7 million and the principal amount carrying value was $ 197.5 million.

The credit facility term loan is reported net of $ 7.4 million in unamortized discount and debt issuance costs in the Condensed Consolidated Balance Sheet as of July 9, 2023.

As of October 1, 2023, the fair value of the credit facility was approximately $ 188.0 million and the principal amount carrying value was $ 189.1 million.

The credit facility term loan is reported net of $ 7.0 million in unamortized discount and debt issuance costs in the Condensed Consolidated Balance Sheet as of October 1, 2023.

The carrying value of the credit facility was $ 214.0 million and the fair value of the credit facility was $ 205.1 million as of December 25, 2022.

9 unchanged sentences

A significant increase in the number of these claims, or one or more successful claims resulting in greater liabilities than we currently anticipate, could materially and adversely affect our business, financial condition, results of operations, and cash flows.

As of July 9, 2023, we had a balance of $ 10.1 million for loss contingencies included within Accrued liabilities and other on our Condensed Consolidated Balance Sheet.

As of October 1, 2023, we had a balance of $ 13.7 million for loss contingencies included within Accrued liabilities and other on our Condensed Consolidated Balance Sheet.

In the normal course of business, there are various claims in process, matters in litigation, administrative proceedings, and other contingencies.

These include employment related claims and class action lawsuits, claims from Guests or Team Members alleging illness, injury, food quality, health, or operational concerns, and lease and other commercial disputes.

We increased our estimate of loss contingency liabilities by approximately $ 1.2 million for the twelve weeks ended July 9, 2023 and $ 5.5 million for the twenty-eight weeks ended July 9, 2023 related to changes during the second quarter in the status of ongoing litigation matters.

We increased our estimate of loss contingency liabilities by approximately $ 3.6 million for the twelve weeks ended October 1, 2023 and $ 9.1 million for the forty weeks ended October 1, 2023 related to changes during the third quarter in the status of ongoing litigation matters.

We ultimately may be subject to greater or less than the accrued amount for this and other matters.

As of July 9, 2023, we had non-cancellable purchase commitments to certain vendors who provide food and beverages and other supplies to our restaurants, for an aggregate of $ 127.7 million.

As of October 1, 2023, we had non-cancellable purchase commitments to certain vendors who provide food and beverages and other supplies to our restaurants, for an aggregate of $ 216.6 million.

We expect to fulfill our commitments under these agreements in the normal course of business, and as such, no liability has been recorded.

21 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements