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SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended
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Dec. 26, 2018
Condensed Financial Information Disclosure [Abstract] |
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT | SHAKE SHACK INC. CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) (in thousands, except share and per share amounts)
|  |  | December 26 2018 |  |  | December 27 2017 |
ASSETS |  |  |
Current assets: |  |  |
| Cash | $ | 5,686 |  |  | $ | 4,988 |
| Prepaid expenses | 135 |  |  | 100 |
| Total current assets | 5,821 |  |  | 5,088 |
Deferred income taxes, net | 242,353 |  |  | 185,750 |
Investment in subsidiaries | 185,331 |  |  | 142,314 |
TOTAL ASSETS | $ | 433,505 |  |  | $ | 333,152 |
LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
Current liabilities: |  |  |
| Accrued expenses | 171 |  |  | 70 |
| Due to SSE Holdings | 3,534 |  |  | 4,217 |
| Current portion of liabilities under tax receivable agreement | 5,804 |  |  | 937 |
| Total current liabilities | 9,509 |  |  | 5,224 |
Liabilities under tax receivable agreement, net of current portion | 197,921 |  |  | 158,436 |
Total liabilities | 207,430 |  |  | 163,660 |
Commitments and contingencies |  |  |
Stockholders' equity: |  |  |
| Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 26, 2018 and December 27, 2017, respectively. | — |  |  | — |
| Class A common stock, $0.001 par value—200,000,000 shares authorized; 29,520,833 and 26,527,477 shares issued and outstanding as of December 26, 2018 and December 27, 2017, respectively. | 30 |  |  | 27 |
| Class B common stock, $0.001 par value—35,000,000 shares authorized; 7,557,347 and 10,250,007 shares issued and outstanding as of December 26, 2018 and December 27, 2017, respectively. | 8 |  |  | 10 |
| Additional paid-in capital | 195,633 |  |  | 153,105 |
| Retained earnings | 30,404 |  |  | 16,399 |
| Accumulated other comprehensive loss | — |  |  | (49 | )
| Total stockholders' equity | 226,075 |  |  | 169,492 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 433,505 |  |  | $ | 333,152 |
See accompanying Notes to Condensed Financial Statements. SHAKE SHACK INC. CONDENSED STATEMENTS OF INCOME (LOSS) (PARENT COMPANY ONLY) (in thousands)
|  |  | Fiscal Year Ended |
|  |  | December 26 2018 |  |  | December 27 2017 |  |  | December 28 2016 |
Intercompany revenue | $ | 2,055 |  |  | $ | 1,466 |  |  | $ | 1,603 |
TOTAL REVENUE | 2,055 |  |  | 1,466 |  |  | 1,603 |
General and administrative expenses | 1,933 |  |  | 1,692 |  |  | 1,603 |
TOTAL EXPENSES | 1,933 |  |  | 1,692 |  |  | 1,603 |
OPERATING INCOME (LOSS) | 122 |  |  | (226 | ) |  | — |
Equity in net income of subsidiaries | 21,537 |  |  | 22,090 |  |  | 16,982 |
Other income | 78 |  |  | 127,221 |  |  | 688 |
Interest expense | (14 | ) |  | (50 | ) |  | (16 | )
INCOME BEFORE INCOME TAXES | 21,723 |  |  | 149,035 |  |  | 17,654 |
Income tax expense | 6,544 |  |  | 149,355 |  |  | 5,208 |
NET INCOME (LOSS) | $ | 15,179 |  |  | $ | (320 | ) |  | $ | 12,446 |
See accompanying Notes to Condensed Financial Statements. SHAKE SHACK INC. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (PARENT COMPANY ONLY) (in thousands)
|  |  | Fiscal Year Ended |
|  |  | December 26 2018 |  |  | December 27 2017 |  |  | December 28 2016 |
Net income (loss) | $ | 15,179 |  |  | $ | (320 | ) |  | $ | 12,446 |
Other comprehensive income (loss), net of tax: |  |  |  |  |
| Available-for-sale securities(1): |  |  |  |  |
|  | Change in net unrealized holding losses | (3 | ) |  | (67 | ) |  | (22 | )
|  | Less: reclassification adjustments for net realized losses included in net income | 13 |  |  | 33 |  |  | 12 |
|  | Net change | 10 |  |  | (34 | ) |  | (10 | )
OTHER COMPREHENSIVE INCOME (LOSS) | 10 |  |  | (34 | ) |  | (10 | )
COMPREHENSIVE INCOME (LOSS) | $ | 15,189 |  |  | $ | (354 | ) |  | $ | 12,436 |
(1) Net of tax benefit of $0 for fiscal years ended December 26, 2018, December 27, 2017 and December 28, 2016. See accompanying Notes to Condensed Financial Statements. SHAKE SHACK INC. CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY) (in thousands)
|  |  |  |  |  | Fiscal Year Ended |
|  |  |  |  |  | December 26 2018 |  |  | December 27 2017 |  |  | December 28 2016 |
OPERATING ACTIVITIES |  |  |  |  |
Net income (loss) | $ | 15,179 |  |  | $ | (320 | ) |  | $ | 12,446 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |  |  |  |
| Equity in net income of subsidiaries | (21,537 | ) |  | (22,090 | ) |  | (16,982 | )
| Equity-based compensation | 252 |  |  | 234 |  |  | 189 |
| Non-cash reimbursement revenue treated as investment | — |  |  | — |  |  | (189 | )
| Deferred income taxes | 777 |  |  | 146,095 |  |  | (462 | )
| Other non-cash income | (78 | ) |  | (127,221 | ) |  | (688 | )
| Changes in operating assets and liabilities: |  |  |  |  |
|  | Accounts receivable | — |  |  | 2 |  |  | (2 | )
|  | Prepaid expenses and other current assets | — |  |  | 5 |  |  | (1 | )
|  | Due to/from SSE Holdings | (7,103 | ) |  | (5,339 | ) |  | 214 |
|  | Accrued expenses | 5,669 |  |  | 21 |  |  | (11 | )
|  | Other current liabilities | 14 |  |  | (17 | ) |  | 17 |
|  | Income taxes payable | — |  |  | 2,990 |  |  | 5,023 |
NET CASH USED IN OPERATING ACTIVITIES | (6,827 | ) |  | (5,640 | ) |  | (446 | )
INVESTING ACTIVITIES |  |  |  |  |
Purchases of LLC Interests from SSE Holdings | (11,142 | ) |  | (5,522 | ) |  | (4,559 | )
Return of investment in SSE Holdings | 2,053 |  |  | 4,101 |  |  | 2,694 |
NET CASH USED IN INVESTING ACTIVITIES | (9,089 | ) |  | (1,421 | ) |  | (1,865 | )
FINANCING ACTIVITIES |  |  |  |  |
Proceeds from issuance of Class A common stock to SSE Holdings upon settlement of equity awards | 11,142 |  |  | 5,522 |  |  | 2,489 |
Proceeds from stock option exercises | 5,472 |  |  | 7,586 |  |  | 3,185 |
Payments under tax receivable agreement | — |  |  | (4,844 | ) |  | — |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 16,614 |  |  | 8,264 |  |  | 5,674 |
INCREASE IN CASH | 698 |  |  | 1,203 |  |  | 3,363 |
CASH AT BEGINNING OF PERIOD | 4,988 |  |  | 3,785 |  |  | 422 |
CASH AT END OF PERIOD | $ | 5,686 |  |  | $ | 4,988 |  |  | $ | 3,785 |
See accompanying Notes to Condensed Financial Statements. NOTE 1: ORGANIZATION Sha ke Shack Inc. (the "Parent Company") was formed on September 23, 2014 as a Delaware corporation and is a holding company with no direct operations. The Parent Company's assets consist primarily of its equity interest in SSE Holdings, LLC ("SSE Holdings") and certain deferred tax assets. The Parent Company's cash inflows are primarily from cash dividends or distributions and other transfers from SSE Holdings. The amounts available to the Parent Company to fulfill cash commitments and pay cash dividends on its common stock are subject to certain restrictions in SSE Holdings' revolving credit agreement. See Note 9 to the consolidated financial statements. NOTE 2: BASIS OF PRESENTATION These condensed parent company financial statements should be read in conjunction with the consolidated financial statements of Shake Shack Inc. and the accompanying notes thereto, included in this Annual Report on Form 10-K. For purposes of these condensed financial statements, the Parent Company's interest in SSE Holdings is recorded based upon its proportionate share of SSE Holdings' net assets (similar to presenting them on the equity method). The Parent Company is the sole managing member of SSE Holdings, and pursuant to the Third Amended and Restated LLC Agreement of SSE Holdings (the “SSE Holdings LLC Agreement”), receives compensation in the form of reimbursements for all costs associated with being a public company and maintaining its existence. Intercompany revenue consists of these reimbursement payments and is recognized when the corresponding expense to which it relates is recognized. Certain intercompany balances presented in these condensed parent company financial statements are eliminated in the consolidated financial statements. As of December 26, 2018, $3,534 of intercompany payables were eliminated in consolidation and $4,217 of intercompany payables were eliminated in consolidation as of December 27, 2017. For fiscal 2018, $2,055 and $21,537 of intercompany revenue and equity in net income of subsidiaries, respectively, was eliminated in consolidation. For fiscal 2017, $1,466 and $22,090 of intercompany revenue and equity in net income of subsidiaries, respectively, was eliminated in consolidation. Related party amounts that were not eliminated in the consolidated financial statements include the Parent Company's liabilities under the tax receivable agreement, which totaled $203,725 and $159,373 as of December 26, 2018 and December 27, 2017, respectively. NOTE 3: COMMITMENTS AND CONTINGENCIES On February 4, 2015, the Parent Company entered into a tax receivable agreement with the non-controlling interest holders that provides for payments to the non-controlling interest holders of 85% of the amount of any tax benefits that the Parent Company actually realizes, or in some cases is deemed to realize, as a result of certain transactions. S ee Note 15 to the consolidated financial statements for more information regarding the Parent Company's tax receivable agreement. As described in Note 18 to the consolidated financial statements, a mounts payable under the tax receivable agreement are contingent upon, among other things, (i) generation of future taxable income of Shake Shack Inc. over the term of the tax receivable agreement and (ii) future changes in tax laws. As of December 26, 2018 and December 27, 2017, liabilities under the tax receivable agreement totaled $203,725 and $159,373, respectively. NOTE 4: SUPPLEMENTAL CASH FLOW INFORMATION The following table sets forth supplemental cash flow information for fiscal 2018, 2017 and 2016:
|  |  |  |  |  | 2018 |  |  | 2017 |  |  | 2016 |
Cash paid for: |  |  |  |  |
| Income taxes | $ | 185 |  |  | $ | 253 |  |  | $ | 576 |
| Interest | — |  |  | 2 |  |  | — |
Non-cash investing activities: |  |  |  |  |
| Accrued contribution related to stock option exercises | 5,472 |  |  | 7,586 |  |  | 1,116 |
| Class A common stock issued in connection with the acquisition of LLC Interests upon redemption by the non-controlling interest holders | 15,202 |  |  | 4,415 |  |  | 18,944 |
| Non-cash contribution made in connection with equity awards granted to employees of SSE Holdings | 5,999 |  |  | 5,497 |  |  | 5,304 |
Non-cash financing activities: |  |  |  |  |
| Cancellation of Class B common stock in connection with the Organizational Transactions |  |  |  |  |
| Cancellation of Class B common stock in connection with the redemption of LLC Interests | (2 | ) |  | (1 | ) |  | (5 | )
| Establishment of liabilities under tax receivable agreement | 44,338 |  |  | 18,973 |  |  | 100,063 |

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=108774443&loc=d3e5283-111683 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 235 -Section S99 -Paragraph 2 -Subparagraph (SX 210.9-06) -URI http://asc.fasb.org/extlink&oid=6882215&loc=d3e537971-122884 + Details
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