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Adoption of ASU 2014-09, "Revenue from Contracts with Customers" (Tables) | 9 Months Ended
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Sep. 30, 2018
Adoption of ASU 2014-09, "Revenue from Contracts with Customers" |
Schedule of impacts of adoption of ASU 2014-09 | The following chart presents the specific line items impacted by the cumulative adjustment.
|  |  |  |  |  |  |  | Adjusted
|  | As Reported |  |  |  |  |  | Balance Sheet
|  | December 31, |  |  | Total |  |  | at January 1,
(In thousands, except per share amounts) |  | 2017 |  |  | Adjustments |  |  | 2018
Assets |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 22,345 |  | $ | 4,279 |  | $ | 26,624
Accounts receivable, net |  |  | 64,644 |  |  | 493 |  |  | 65,137
Notes receivable, net |  |  | 4,333 |  |  | — |  |  | 4,333
Income tax receivable |  |  | 3,903 |  |  | — |  |  | 3,903
Inventories |  |  | 30,620 |  |  | — |  |  | 30,620
Prepaid expenses |  |  | 28,522 |  |  | (4,959) |  |  | 23,563
Other current assets |  |  | 9,494 |  |  | — |  |  | 9,494
Assets held for sale |  |  | 6,133 |  |  | — |  |  | 6,133
Total current assets |  |  | 169,994 |  |  | (187) |  |  | 169,807
Property and equipment, net |  |  | 234,331 |  |  | — |  |  | 234,331
Notes receivable, less current portion, net |  |  | 15,568 |  |  | — |  |  | 15,568
Goodwill |  |  | 86,892 |  |  | — |  |  | 86,892
Deferred income taxes, net |  |  | 585 |  |  | — |  |  | 585
Other assets |  |  | 48,183 |  |  | (907) |  |  | 47,276
Total assets |  | $ | 555,553 |  | $ | (1,094) |  | $ | 554,459
Liabilities and stockholders’ equity (deficit) |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 32,006 |  | $ | (2,161) |  | $ | 29,845
Income and other taxes payable |  |  | 10,561 |  |  | — |  |  | 10,561
Accrued expenses and other current liabilities |  |  | 70,293 |  |  | 15,860 |  |  | 86,153
Deferred revenue current |  |  | — |  |  | 2,400 |  |  | 2,400
Current portion of long-term debt |  |  | 20,000 |  |  | — |  |  | 20,000
Total current liabilities |  |  | 132,860 |  |  | 16,099 |  |  | 148,959
Deferred revenue |  |  | 2,652 |  |  | 10,798 |  |  | 13,450
Long-term debt, less current portion, net |  |  | 446,565 |  |  | — |  |  | 446,565
Deferred income taxes, net |  |  | 12,546 |  |  | (6,464) |  |  | 6,082
Other long-term liabilities |  |  | 60,146 |  |  | — |  |  | 60,146
Total liabilities |  |  | 654,769 |  |  | 20,433 |  |  | 675,202
Redeemable noncontrolling interests |  |  | 6,738 |  |  | — |  |  | 6,738
Stockholders’ equity (deficit): |  |  |  |  |  |  |  |  |
Preferred stock ($0.01 par value per share; no shares issued) |  |  | — |  |  | — |  |  | —
Common stock ($0.01 par value per share; issued 44,221 at December 31, 2017 |  |  | 442 |  |  | — |  |  | 442
Additional paid-in capital |  |  | 184,785 |  |  | — |  |  | 184,785
Accumulated other comprehensive loss |  |  | (2,117) |  |  | — |  |  | (2,117)
Retained earnings |  |  | 292,251 |  |  | (21,527) |  |  | 270,724
Treasury stock (10,290 shares at December 31, 2017, at cost) |  |  | (597,072) |  |  | — |  |  | (597,072)
Total stockholders’ (deficit), net of noncontrolling interests |  |  | (121,711) |  |  | (21,527) |  |  | (143,238)
Noncontrolling interests in subsidiaries |  |  | 15,757 |  |  | — |  |  | 15,757
Total stockholders’ (deficit) |  |  | (105,954) |  |  | (21,527) |  |  | (127,481)
Total liabilities, redeemable noncontrolling interests and stockholders’ (deficit) |  | $ | 555,553 |  | $ | (1,094) |  | $ | 554,459
The impact of adoption for the third quarter of 2018 is as follows:
|  | As Reported |  |  |  |  |  | Balance Sheet
|  | September 30, |  |  | Total |  |  | Without Adoption
(In thousands, except per share amounts) |  | 2018 |  |  | Adjustments |  |  | of Topic 606
Assets |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 24,880 |  | $ | (4,420) |  | $ | 20,460
Accounts receivable, net |  |  | 53,157 |  |  | (396) |  |  | 52,761
Notes receivable, net |  |  | 6,466 |  |  | — |  |  | 6,466
Income tax receivable |  |  | 11,051 |  |  | — |  |  | 11,051
Inventories |  |  | 29,311 |  |  | — |  |  | 29,311
Prepaid expenses |  |  | 20,106 |  |  | 5,435 |  |  | 25,541
Other current assets |  |  | 7,400 |  |  | — |  |  | 7,400
Assets held for sale |  |  | — |  |  | — |  |  | —
Total current assets |  |  | 152,371 |  |  | 619 |  |  | 152,990
Property and equipment, net |  |  | 224,510 |  |  | — |  |  | 224,510
Notes receivable, less current portion, net |  |  | 16,097 |  |  | — |  |  | 16,097
Goodwill |  |  | 84,830 |  |  | — |  |  | 84,830
Deferred income taxes, net |  |  | 700 |  |  | — |  |  | 700
Other assets |  |  | 72,654 |  |  | 907 |  |  | 73,561
Total assets |  | $ | 551,162 |  | $ | 1,526 |  | $ | 552,688
Liabilities and stockholders’ equity (deficit) |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 32,355 |  | $ | 799 |  | $ | 33,154
Income and other taxes payable |  |  | 8,964 |  |  | — |  |  | 8,964
Accrued expenses and other current liabilities |  |  | 100,081 |  |  | (16,743) |  |  | 83,338
Deferred revenue current |  |  | 2,389 |  |  | (2,389) |  |  | —
Current portion of long-term debt |  |  | 20,000 |  |  | — |  |  | 20,000
Total current liabilities |  |  | 163,789 |  |  | (18,333) |  |  | 145,456
Deferred revenue |  |  | 14,946 |  |  | (11,159) |  |  | 3,787
Long-term debt, less current portion, net |  |  | 555,755 |  |  | — |  |  | 555,755
Deferred income taxes, net |  |  | 7,812 |  |  | 6,958 |  |  | 14,770
Other long-term liabilities |  |  | 77,604 |  |  | — |  |  | 77,604
Total liabilities |  |  | 819,906 |  |  | (22,534) |  |  | 797,372
Redeemable noncontrolling interests |  |  | 5,979 |  |  | — |  |  | 5,979
Stockholders’ (deficit): |  |  |  |  |  |  |  |  |
Preferred stock ($0.01 par value per share; no shares issued) |  |  | — |  |  | — |  |  | —
Common stock ($0.01 par value per share; issued 44,299 at September 30, 2018) |  |  | 443 |  |  | — |  |  | 443
Additional paid-in capital |  |  | 190,135 |  |  | — |  |  | 190,135
Accumulated other comprehensive income (loss) |  |  | 3,605 |  |  | — |  |  | 3,605
Retained earnings |  |  | 267,580 |  |  | 24,018 |  |  | 291,598
Treasury stock (12,933 shares at September 30, 2018, at cost) |  |  | (751,895) |  |  | — |  |  | (751,895)
Total stockholders’ (deficit), net of noncontrolling interests |  |  | (290,132) |  |  | 24,018 |  |  | (266,114)
Noncontrolling interests in subsidiaries |  |  | 15,409 |  |  | 42 |  |  | 15,451
Total stockholders’ (deficit) |  |  | (274,723) |  |  | 24,060 |  |  | (250,663)
Total liabilities, redeemable noncontrolling interests and stockholders’ (deficit) |  | $ | 551,162 |  | $ | 1,526 |  | $ | 552,688
|  | As Reported |  |  |  |  |
|  | Three Months Ended |  |  |  |  | Statement of Operations
|  | September 30, |  | Total |  | Without Adoption of
(In thousands, except per share amounts) |  | 2018 |  | Adjustments |  | Topic 606
Revenues: |  |  |  |  |  |  |  |  |
Domestic Company-owned restaurant sales |  | $ | 158,285 |  | $ | 1,185 |  | $ | 159,470
North America franchise royalties and fees |  |  | 12,806 |  |  | 91 |  |  | 12,897
North America commissary |  |  | 146,240 |  |  | — |  |  | 146,240
International |  |  | 25,653 |  |  | (112) |  |  | 25,541
Other revenues |  |  | 21,023 |  |  | (2,650) |  |  | 18,373
Total revenues |  |  | 364,007 |  |  | (1,486) |  |  | 362,521
Costs and expenses: |  |  |  |  |  |  |  |  |
Operating costs (excluding depreciation and amortization shown separately below): |  |  |  |  |  |  |  |  |
Domestic Company-owned restaurant expenses |  |  | 135,836 |  |  | (126) |  |  | 135,710
North America commissary |  |  | 137,928 |  |  | — |  |  | 137,928
International expenses |  |  | 15,184 |  |  | — |  |  | 15,184
Other expenses |  |  | 22,002 |  |  | (2,282) |  |  | 19,720
General and administrative expenses |  |  | 55,462 |  |  | (317) |  |  | 55,145
Depreciation and amortization |  |  | 11,585 |  |  | — |  |  | 11,585
Total costs and expenses |  |  | 377,997 |  |  | (2,725) |  |  | 375,272
Refranchising loss, net |  |  | — |  |  | — |  |  | —
Operating (loss) income |  |  | (13,990) |  |  | 1,239 |  |  | (12,751)
Net Interest expense |  |  | (5,963) |  |  | — |  |  | (5,963)
(Loss) Income before income taxes |  |  | (19,953) |  |  | 1,239 |  |  | (18,714)
Income tax (benefit) expense |  |  | (7,359) |  |  | 277 |  |  | (7,082)
Net (loss) income before attribution to noncontrolling interests |  |  | (12,594) |  |  | 962 |  |  | (11,632)
Income attributable to noncontrolling interests |  |  | (439) |  |  | — |  |  | (439)
Net (loss) income attributable to the Company |  | $ | (13,033) |  | $ | 962 |  | $ | (12,071)
Calculation of (loss) income for (loss) earnings per share: |  |  |  |  |  |  |  |  |
Net (loss) income attributable to the Company |  | $ | (13,033) |  | $ | 962 |  | $ | (12,071)
Net income attributable to participating securities |  |  | — |  |  | — |  |  | —
Net (loss) income attributable to common shareholders |  | $ | (13,033) |  | $ | 962 |  | $ | (12,071)
Basic (loss) earnings per common share |  | $ | (0.41) |  | $ | 0.03 |  | $ | (0.38)
Diluted (loss) earnings per common share |  | $ | (0.41) |  | $ | 0.03 |  | $ | (0.38)
Basic weighted average common shares outstanding |  |  | 31,573 |  |  | 31,573 |  |  | 31,573
Diluted weighted average common shares outstanding |  |  | 31,573 |  |  | 31,573 |  |  | 31,573
|  | As Reported |  |  |  |  |
|  | Nine Months Ended |  |  |  |  | Statement of Operations
|  | September 30, |  | Total |  | Without Adoption of
(In thousands, except per share amounts) |  | 2018 |  | Adjustments |  | Topic 606
Revenues: |  |  |  |  |  |  |  |  |
Domestic Company-owned restaurant sales |  | $ | 529,906 |  | $ | 2,261 |  | $ | 532,167
North America franchise royalties and fees |  |  | 61,524 |  |  | 211 |  |  | 61,735
North America commissary |  |  | 461,408 |  |  | — |  |  | 461,408
International |  |  | 84,836 |  |  | 212 |  |  | 85,048
Other revenues |  |  | 61,661 |  |  | (8,420) |  |  | 53,241
Total revenues |  |  | 1,199,335 |  |  | (5,736) |  |  | 1,193,599
Costs and expenses: |  |  |  |  |  |  |  |  |
Operating costs (excluding depreciation and amortization shown separately below): |  |  |  |  |  |  |  |  |
Domestic Company-owned restaurant expenses |  |  | 440,936 |  |  | (464) |  |  | 440,472
North America commissary |  |  | 432,909 |  |  | — |  |  | 432,909
International expenses |  |  | 52,462 |  |  | — |  |  | 52,462
Other expenses |  |  | 63,658 |  |  | (8,592) |  |  | 55,066
General and administrative expenses |  |  | 133,903 |  |  | 221 |  |  | 134,124
Depreciation and amortization |  |  | 34,855 |  |  | — |  |  | 34,855
Total costs and expenses |  |  | 1,158,723 |  |  | (8,835) |  |  | 1,149,888
Refranchising loss, net |  |  | (1,918) |  |  | — |  |  | (1,918)
Operating (loss) income |  |  | 38,694 |  |  | 3,099 |  |  | 41,793
Net Interest (benefit) expense |  |  | (16,580) |  |  | — |  |  | (16,580)
Income before income taxes |  |  | 22,114 |  |  | 3,099 |  |  | 25,213
Income tax (benefit) expense |  |  | 4,663 |  |  | 695 |  |  | 5,358
Net (loss) income before attribution to noncontrolling interests |  |  | 17,451 |  |  | 2,404 |  |  | 19,855
Income attributable to noncontrolling interests |  |  | (1,956) |  |  | — |  |  | (1,956)
Net (loss) income attributable to the Company |  | $ | 15,495 |  | $ | 2,404 |  | $ | 17,899
Calculation of income for earnings per share: |  |  |  |  |  |  |  |  |
Net income attributable to the Company |  | $ | 15,495 |  | $ | 2,404 |  | $ | 17,899
Net income attributable to participating securities |  |  | (147) |  |  | — |  |  | (147)
Net income attributable to common shareholders |  | $ | 15,348 |  | $ | 2,404 |  | $ | 17,752
Basic (loss) earnings per common share |  | $ | 0.48 |  | $ | 0.07 |  | $ | 0.55
Diluted (loss) earnings per common share |  | $ | 0.47 |  | $ | 0.07 |  | $ | 0.55
Basic weighted average common shares outstanding |  |  | 32,265 |  |  | 32,265 |  |  | 32,265
Diluted weighted average common shares outstanding |  |  | 32,489 |  |  | 32,489 |  |  | 32,489
Schedule of estimated revenue expected to be recognized in the future | The following table (in thousands) includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period.
|  |  | Performance Obligations by Period
|  | Less than 1 Year |  | 1-2 Years |  | 2-3 Years |  | 3-4 Years |  | 4-5 Years |  | Thereafter |  | Total
Franchise Fees |  | $ | 2,389 |  | $ | 2,181 |  | $ | 1,952 |  | $ | 1,748 |  | $ | 1,465 |  | $ | 3,813 |  | $ | 13,548

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