What changed in this filing

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Item 1. Financial Statements

2024-10-30 compared with 2024-07-31 · 77 added, 56 removed, 281 unchanged (32% of the section changed)

4 unchanged sentences

(amounts in thousands, except share and par value amounts)

September 28,

2024 December 30,

30 unchanged sentences

100,000,000 shares authorized;

29,304,401 and 29,337,920 shares issued and outstanding as of June 29, 2024 and December 30, 2023, respectively

29,212,082 and 29,337,920 shares issued and outstanding as of September 28, 2024 and December 30, 2023, respectively

Additional paid-in-capital 1,515 2,676

8 unchanged sentences

(amounts in thousands, except per share data)

Thirteen Weeks Ended Twenty-Six Weeks Ended

2023 June 29,

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Royalty revenue, franchise fees and other $ 74,395 $ 53,200 $ 212,652 $ 149,372

32 unchanged sentences

Consolidated Statements of Stockholders' Deficit

For the Twenty-Six Weeks Ended July 1, 2023

For the Thirty-Nine Weeks Ended September 30, 2023

(amounts in thousands, except share data)

17 unchanged sentences

Balance at July 1, 2023 29,977,614 $ 300 $ 2,038 $ ( 367,327 ) $ ( 362 ) $ ( 365,351 )

Net income — — — 19,511 — 19,511

Shares issued under stock plans 4,857 — 270 — — 270

Purchases of common stock ( 567,151 ) ( 6 ) ( 241 ) ( 125,878 ) — ( 126,125 )

Tax payments for restricted stock upon vesting ( 400 ) — — ( 66 ) — ( 66 )

Stock-based compensation expense, net of forfeitures — — 3,128 — — 3,128

Dividends declared on common stock and equivalents — — ( 3,957 ) ( 2,653 ) — ( 6,610 )

Currency translation adjustment — $ — $ — $ — $ ( 199 ) $ ( 199 )

Balance at September 30, 2023 29,414,920 $ 294 $ 1,238 $ ( 476,413 ) $ ( 561 ) $ ( 475,442 )

See accompanying notes to consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Stockholders' Deficit

For the Twenty-Six Weeks Ended June 29, 2024

For the Thirty-Nine Weeks Ended September 28, 2024

(amounts in thousands, except share data)

17 unchanged sentences

Balance at June 29, 2024 29,304,401 $ 293 $ 1,869 $ ( 439,326 ) $ ( 377 ) $ ( 437,541 )

Net income — — — 25,732 — 25,732

Shares issued under stock plans 1,850 — — — — —

Purchases of common stock ( 93,617 ) ( 1 ) ( 7,307 ) ( 27,887 ) — ( 35,195 )

Tax payments for restricted stock upon vesting ( 552 ) — — ( 230 ) — ( 230 )

Stock-based compensation expense, net of forfeitures — — 7,273 — — 7,273

Dividends declared on common stock and equivalents — — ( 320 ) ( 7,625 ) — ( 7,945 )

Currency translation adjustment — — — — 440 440

Balance at September 28, 2024 29,212,082 $ 292 $ 1,515 $ ( 449,336 ) $ 63 $ ( 447,466 )

See accompanying notes to consolidated financial statements.

3 unchanged sentences

(amounts in thousands)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

September 28,

2024 September 30,

Operating activities

38 unchanged sentences

Wingstop Inc., together with its consolidated subsidiaries (collectively, “Wingstop” or the “Company”), is in the business of franchising and operating Wingstop restaurants.

As of June 29, 2024, the Company had a total of 2,352 restaurants system-wide.

As of September 28, 2024, the Company had a total of 2,458 restaurants system-wide.

The Company’s restaurant base is approximately 98 % franchised, with 2,402 franchised locations (including 338 restaurants in international locations and U.S.

territories) and 52 company-owned restaurants as of June 29, 2024.

territories) and 56 company-owned restaurants as of September 28, 2024.

Basis of presentation.

1 unchanged sentence

Consequently, financial information and disclosures normally included in financial statements prepared annually in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted.

Balance sheet amounts are as of June 29, 2024 and December 30, 2023, and operating results are for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023.

Balance sheet amounts are as of September 28, 2024 and December 30, 2023, and operating results are for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023.

Certain prior period information on the Consolidated Balance Sheets have been reclassified to conform to the current presentation.

1 unchanged sentence

The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year.

The accompanying interim unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.

The Company uses a 52- or 53-week fiscal year that ends on the last Saturday of the calendar year.

1 unchanged sentence

Cash, Cash Equivalents, and Restricted Cash.

Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of June 29, 2024 and December 30, 2023 were as follows (in thousands):

June 29, 2024 December 30, 2023

Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of September 28, 2024 and December 30, 2023 were as follows (in thousands):

September 28, 2024 December 30, 2023

Cash and cash equivalents $ 83,958 $ 90,216

4 unchanged sentences

We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements.

There have been no changes to the recently issued accounting pronouncements not yet adopted disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.

There have been no changes to the recently issued accounting pronouncements not yet adopted disclosed in the Annual Report.

(2) Earnings per Share

6 unchanged sentences

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

Thirteen Weeks Ended Twenty-Six Weeks Ended

2023 June 29,

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Basic weighted average shares outstanding 29,265 29,750 29,319 29,889

1 unchanged sentence

Diluted weighted average shares outstanding 29,383 29,818 29,441 29,969

For the thirteen weeks ended June 29, 2024 and July 1, 2023, equity awards representing approximately 0 and 1,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.

For the twenty-six weeks ended June 29, 2024 and July 1, 2023, equity awards representing approximately 28,000 and 3,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.

No equity awards were excluded from the dilutive earnings per share calculation for the thirteen and thirty-nine weeks ended September 28, 2024.

For the thirteen and thirty-nine weeks ended September 30, 2023, equity awards representing approximately 9,000 and 5,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.

(3) Stockholders’ Deficit

In connection with the Company’s regular dividend program, in each of the first two quarters of 2024, our Board of Directors declared a quarterly dividend of $ 0.22 per share of common stock, which, in aggregate, totaled $ 12.9 million, or $ 0.44 per share of common stock, and which was paid during the twenty-six weeks ended June 29, 2024.

Subsequent to the second quarter, on July 30, 2024, our Board of Directors declared a quarterly dividend of $ 0.27 per share of common stock for stockholders of record as of August 16, 2024.

The regular quarterly dividend is to be paid on September 6, 2024, totaling approximately $ 7.9 million .

In connection with the Company’s regular dividend program, our Board of Directors declared a quarterly dividend of $ 0.22 per share of common stock in each of the first two quarters of 2024, and a quarterly dividend of $ 0.27 per share of common stock in the third quarter of 2024, resulting in aggregate declared dividends of $ 20.8 million, or $ 0.71 per share of common stock, during the thirty-nine weeks ended September 28, 2024.

Subsequent to the third quarter, on October 29, 2024, our Board of Directors declared a regular quarterly dividend of $ 0.27 per share of common stock for stockholders of record as of November 15, 2024.

The regular quarterly dividend is to be paid on December 6, 2024, totaling approximately $ 7.9 million.

Share Repurchase Program

On August 17, 2023, the Company announced a share repurchase program with authorization to purchase up to $ 250.0 million of its outstanding shares of common stock (the “Share Repurchase Program”).

During the thirteen weeks ended June 29, 2024, the Company repurchased and retired 75,862 shares of its common stock at an average price of $ 381.29 per share.

As of June 29, 2024, $ 96.1 million remained available under the Share Repurchase Program.

During the thirty-nine weeks ended September 28, 2024, the Company repurchased and retired 169,479 shares of its common stock at an average price of $ 377.09 per share.

As of September 28, 2024, $ 61.1 million remained available under the Share Repurchase Program.

(4) Fair Value Measurements

10 unchanged sentences

(“LPH”), are determined on a non-recurring basis, which results are summarized as follows (in thousands):

June 29, 2024 December 30, 2023

September 28, 2024 December 30, 2023

Fair Value Carrying

10 unchanged sentences

(5) Income Taxes

Income tax expense and the effective tax rate were $ 9.0 million and 24.7 %, respectively, for the thirteen weeks ended June 29, 2024, and $ 6.1 million and 27.3 %, respectively, for the thirteen weeks ended July 1, 2023.

Income tax expense and the effective tax rate were $ 18.8 million and 25.0 %, respectively, for the twenty-six weeks ended June 29, 2024, and $ 11.3 million and 26.2 %, respectively, for the twenty-six weeks ended July 1, 2023.

The decrease in the effective tax rate is primarily related to an increase in excess tax benefits recognized from stock-based compensation in income tax expense as compared to the prior fiscal period.

Income tax expense and the effective tax rate were $ 9.8 million and 27.5 %, respectively, for the thirteen weeks ended September 28, 2024, and $ 6.6 million and 25.4 %, respectively, for the thirteen weeks ended September 30, 2023.

The increase in the effective tax rate is primarily related to the impact of nondeductible expenses for executive compensation in the current fiscal year period.

Income tax expense and the effective tax rate were $ 28.5 million and 25.8 %, respectively, for the thirty-nine weeks ended September 28, 2024, and $ 18.0 million and 25.9 %, respectively, for the thirty-nine weeks ended September 30, 2023.

(6) Debt Obligations

Long-term debt consisted of the following components (in thousands):

June 29, 2024 December 30, 2023

September 28, 2024 December 30, 2023

2020-1 Class A-2 Senior Secured Notes $ 472,800 $ 472,800

4 unchanged sentences

and consists of (i) Series 2020-1 2.84 % Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Class A-2 Notes”), (ii) Series 2022-1 3.734 % Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Class A-2 Notes”), and (iii) a revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes,” and together with the 2022 Class A-2 Notes, the “2022 Notes”), which permits borrowings of up to a maximum principal amount of $ 200 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit.

No borrowings were outstanding under the 2022 Variable Funding Notes as of June 29, 2024 and December 30, 2023.

As of June 29, 2024, the Company’s leverage ratio under the 2020 Class A-2 Notes and the 2022 Class A-2 Notes was less than 5.0 x.

No borrowings were outstanding under the 2022 Variable Funding Notes as of September 28, 2024 and December 30, 2023.

As of September 28, 2024, the Company’s leverage ratio under the 2020 Class A-2 Notes and the 2022 Class A-2 Notes was less than 5.0 x.

Per the terms of the Company’s debt agreements, principal payments can be suspended at the borrower’s election until the repayment date, as long as the Company maintains a leverage ratio of less than 5.0 x.

14 unchanged sentences

Components of lease expense were as follows (in thousands):

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

September 28,

2024 September 30,

Operating lease cost (1)

4 unchanged sentences

Supplemental cash flow information related to leases is as follows (in thousands):

Twenty-Six Weeks Ended

Cash paid for amounts included in the measurement of lease liabilities:

Thirty-Nine Weeks Ended

September 28,

2024 September 30,

Cash paid (received) for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases (1)

1 unchanged sentence

Right-of-use assets obtained in exchange for new operating lease liabilities $ 41,260 $ 3,947

(1) Includes tenant improvement reimbursements received.

(9) Stock-Based Compensation

During the twenty-six weeks ended June 29, 2024, the Company granted 23,114 restricted stock units (“RSUs”) to certain employees.

The RSUs granted to certain employees generally vest in equal annual amounts over a three-year period subsequent to the grant date and had a weighted-average grant-date fair value of $ 371.17 per unit.

In addition, the Company granted 23,874 performance stock units (“PSUs”) to certain employees during the twenty-six weeks ended June 29, 2024.

During the thirty-nine weeks ended September 28, 2024, the Company granted 25,257 restricted stock units (“RSUs”) to certain employees.

The RSUs granted to certain employees generally vest ratably over a three-year period subsequent to the grant date and had a weighted-average grant-date fair value of $ 372.52 per unit.

In addition, the Company granted 24,015 performance stock units (“PSUs”) to certain employees during the thirty-nine weeks ended September 28, 2024.

Of the total PSUs granted, 20,593 PSUs are subject to a service condition and a performance vesting condition based on return on incremental invested capital (“ROI PSUs”).

The ROI PSUs are generally eligible to cliff-vest approximately three years from the grant date, and the maximum vesting percentage that could be realized for each of the ROI PSUs is 250 % based on the level of performance achieved for the awards.

The remaining 3,281 PSUs granted are subject to a service condition and a performance vesting condition based on the number of net new restaurants opened over the performance

The remaining 3,422 PSUs granted are subject to a service condition and a performance vesting condition based on the number of net new restaurants opened over the

WINGSTOP INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

period (“NNR PSUs”).

The NNR PSUs vest in equal annual amounts over a three-year period, and the maximum vesting percentage that could be realized for each of the NNR PSUs is 100 % based on the level of performance achieved for the awards.

performance period (“NNR PSUs”).

The NNR PSUs vest ratably over a three-year period, and the maximum vesting percentage that could be realized for each of the NNR PSUs is 100 % based on the level of performance achieved for the awards.

The PSUs had a weighted-average grant-date fair value of $ 371.03 per unit.

Total compensation cost for the PSUs is determined based on the most likely outcome of the performance condition and the number of awards expected to vest based on the outcome.

Total compensation expense related to all share-based awards, net of forfeitures recognized, was $ 8.7 million and $ 6.9 million for the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively, and was included in Selling, general and administrative (“SG&A”) expense in the Consolidated Statements of Comprehensive Income.

Total compensation expense related to all share-based awards, net of forfeitures recognized, was $ 16.0 million and $ 10.0 million for the thirty-nine weeks ended September 28, 2024 and September 30, 2023, respectively, and was included in Selling, general and administrative (“SG&A”) expense in the Consolidated Statements of Comprehensive Income.

(10) Revenue from Contracts with Customers

The following table represents a disaggregation of revenue from contracts with customers for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023 (in thousands):

Thirteen Weeks Ended Twenty-Six Weeks Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

The following table represents a disaggregation of revenue from contracts with customers for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023 (in thousands):

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Royalty revenue $ 66,952 $ 47,546 $ 192,344 $ 134,330

3 unchanged sentences

Deferred revenue is reduced as fees are recognized in revenue over the term of the franchise license for the respective restaurant.

As the term of the franchise license is typically ten years , substantially all of the franchise fee revenue recognized in the thirteen and twenty-six weeks ended June 29, 2024 was included in the deferred revenue balance as of December 30, 2023.

Approximately $ 10.3 million and $ 9.3 million of deferred revenue as of June 29, 2024 and December 30, 2023, respectively, relates to restaurants that have not yet opened, so the fees are not yet being amortized.

As the term of the franchise license is typically ten years , substantially all of the franchise fee revenue recognized in the thirteen and thirty-nine weeks ended September 28, 2024 was included in the deferred revenue balance as of December 30, 2023.

Approximately $ 12.5 million and $ 9.3 million of deferred revenue as of September 28, 2024 and December 30, 2023, respectively, relates to restaurants that have not yet opened, so the fees are not yet being amortized.

The weighted average remaining amortization period for deferred franchise and renewal fees related to open restaurants is 7.3 years.

The Company did not have any material contract assets as of June 29, 2024.

The Company did not have any material contract assets as of September 28, 2024.

(11) Acquisitions of Company-owned Restaurants

During the second fiscal quarter ended June 29, 2024, the Company acquired one existing restaurant from a franchisee.

The total purchase price was $ 3.3 million and was funded by cash flow from operations.

The Company acquired four existing restaurants from franchisees during the thirty-nine weeks ended September 28, 2024.

The aggregate purchase price was $ 14.0 million and was funded by cash flow from operations.

The following table summarizes the allocations of the purchase price to the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition (in thousands):

8 unchanged sentences

Pro-forma financial information of the combined entities is not presented due to the immaterial impact of the financial results of the acquisition on our consolidated financial statements.

Subsequent to the end of the fiscal second quarter 2024, the Company acquired two existing restaurants from a franchisee.

The purchase price, in the aggregate, was $ 7.0 million, funded by cash flow from operations.

The restaurant acquisitions are accounted for as business combinations.

The Company is still determining the estimated fair value of assets acquired and liabilities assumed.

The excess of the purchase price over the aggregate fair value of assets acquired will be allocated to

WINGSTOP INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The results of operations of these acquisitions will be included in our Consolidated Statements of Comprehensive Income as of the dates of acquisition.

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