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General (Policies)
 6 Months Ended
Jun. 29, 2023
Accounting Policies [Abstract]  
Basis of Presentation Basis of Presentation - The unaudited consolidated financial statements for the 13 and 26 weeks ended June 29, 2023 and June 30, 2022 have been prepared by the Company. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the unaudited interim financial information at June 29, 2023, and for all periods presented, have been made. The results of operations during the interim periods are not necessarily indicative of the results of operations for the entire year or other interim periods. However, the unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 29, 2022.
Noncontrolling Interests Noncontrolling Interest - The Company has an ownership interest greater than 50% in one joint venture that is considered a Variable Interest Entity (VIE) that is included in the accounts of the Company. The Company is the primary beneficiary of the VIE and the Company’s interest is considered a majority voting interest. The primary asset of this VIE, The Skirvin Hilton, was sold on December 16, 2022. The equity interest of outside owners in consolidated entities is recorded as noncontrolling interest in the consolidated balance sheets.
Depreciation and Amortization Depreciation and Amortization - Depreciation and amortization of property and equipment are provided using the straight-line method over the shorter of the estimated useful lives of the assets or any related lease terms. Depreciation expense totaled $15,986 and $31,854 for the 13 and 26 weeks ended June 29, 2023, respectively, and $16,744 and $33,967 for the 13 and 26 weeks ended June 30, 2022, respectively.
Assets Held for Sale Assets Held for Sale – Long-lived assets that are expected to be sold within the next 12 months and meet the other relevant held-for-sale criteria are classified as assets held for sale and included within current assets on the consolidated balance sheet. Assets held for sale are measured at the lower of their carrying value or their fair value less costs to sell the asset. As of June 29, 2023, assets held for sale consists of excess land.
Long-Lived Assets Long-Lived Assets – The Company periodically considers whether indicators of impairment of long-lived assets held for use are present. This includes quantitative and qualitative factors, including evaluating the historical actual operating performance of the long-lived assets and assessing the potential impact of recent events and transactions impacting the long-lived assets. If such indicators are present, the Company determines if the long-lived assets are recoverable by assessing whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than their carrying amounts. If the long-lived assets are not recoverable, the Company recognizes any impairment losses based on the excess of the carrying amount of the assets over their fair value. There were no indicators of impairment identified during the 26 weeks ended June 29, 2023 or June 30, 2022.
Goodwill Goodwill – The Company reviews goodwill for impairment annually or more frequently if certain indicators arise. The Company performs its annual impairment test on the first day of the fiscal fourth quarter. There were no indicators of impairment identified during the 26 weeks ended June 29, 2023 or June 30, 2022.
Earnings (Loss) Per Share
Earnings (Loss) Per Share - Net earnings (loss) per share (EPS) of Common Stock and Class B Common Stock is computed using the two class method. Basic net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding. Diluted net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options and convertible debt instruments using the if-converted method. Convertible Class B Common Stock and convertible debt instruments are reflected on an if-converted basis when dilutive to Common Stock. The computation of the diluted net earnings (loss) per share of Common Stock assumes the conversion of Class B Common Stock in periods that have net earnings since it would be dilutive to Common Stock earnings per share, while the diluted net earnings (loss) per share of Class B Common Stock does not assume the conversion of those shares.
Holders of Common Stock are entitled to cash dividends per share equal to 110% of all dividends declared and paid on each share of Class B Common Stock. As such, the undistributed earnings (losses) for each period are allocated based on the proportionate share of entitled cash dividends.
The following table illustrates the computation of Common Stock basic and diluted net earnings (loss) per share and provides a reconciliation of the number of weighted-average basic and diluted shares outstanding:
13 Weeks Ended26 Weeks Ended
June 29, 2023June 30, 2022June 29, 2023June 30, 2022
Numerator:
Net earnings (loss) $13,466 $8,960 $4,000 $(5,942)
Denominator (in thousands):
Denominator for basic EPS31,673 31,492 31,622 31,469 
Effect of dilutive employee stock options61 40 52 — 
Effect of convertible notes9,201 9,085 — — 
Denominator for diluted EPS40,935 40,617 31,674 31,469 
Net earnings (loss) per share - basic:
Common Stock$0.43 $0.29 $0.13 $(0.19)
Class B Common Stock$0.39 $0.26 $0.12 $(0.18)
Net earnings (loss) per share - diluted:
Common Stock$0.35 $0.24 $0.13 $(0.19)
Class B Common Stock$0.34 $0.23 $0.12 $(0.18)
For the periods when the Company reports a net loss, common stock equivalents are excluded from the computation of diluted loss per share as their inclusion would have an antidilutive effect. During the 26 weeks ended June 30, 2022, approximately 61,791 common stock equivalents were excluded from the computation of diluted loss per share due to the Company’s net loss. During the 26 weeks ended June 29, 2023, and June 30, 2022, respectively, 9,200,907 and 9,084,924 shares related to the convertible notes were excluded from the computation of diluted loss per share as the effect would have been anti-dilutive.
Fair Value Measurements
Fair Value Measurements - Certain financial assets and liabilities are recorded at fair value in the consolidated financial statements. Some are measured on a recurring basis while others are measured on a non-recurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. A fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.
The Company’s assets and liabilities measured at fair value are classified in one of the following categories:
Level 1 - Assets or liabilities for which fair value is based on quoted prices in active markets for identical instruments as of the reporting date. At June 29, 2023 and December 29, 2022, respectively, the Company’s $4,894 and $3,932 of debt and equity securities classified as trading were valued using Level 1 pricing inputs and were included in other current assets. At June 29, 2023 and December 29, 2022, respectively, the Company’s $34,999 and $6,000 of investments in money market funds were valued using Level 1 pricing inputs and were included in cash and cash equivalents.
Level 2 - Assets or liabilities for which fair value is based on pricing inputs that were either directly or indirectly observable as of the reporting date. At December 29, 2022, the Company’s $108 asset related to the Company’s interest rate swap contract was valued using Level 2 pricing inputs. This contracted terminated on March 1, 2023.
Level 3 - Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. At June 29, 2023 and December 29, 2022, none of the Company’s recorded assets or liabilities that are measured on a recurring basis at fair market value were valued using Level 3 pricing inputs.
The carrying value of the Company’s financial instruments (including cash and cash equivalents, restricted cash, accounts receivable and accounts payable) approximates fair value. The fair value of the Company’s $80,000 of senior notes, valued using Level 2 pricing inputs, is approximately $72,187 at June 29, 2023, determined based upon discounted cash flows using current market interest rates for financial instruments with a similar average remaining life. The fair value of the Company's $100,050 of convertible senior notes, valued using Level 2 pricing inputs, is approximately $150,020 at June 29, 2023, determined based on market rates and the closing trading price of the convertible senior notes as of June 29, 2023. The carrying amounts of the Company’s remaining long-term debt approximate their fair values, determined using current rates for similar instruments, or Level 2 pricing inputs.
Defined Benefit Plan
Defined Benefit Plan - The components of the net periodic pension cost of the Company’s unfunded nonqualified, defined-benefit plan are as follows:
13 Weeks Ended26 Weeks Ended
June 29, 2023June 30, 2022June 29, 2023June 30, 2022
Service cost$122 $264 $244 $528 
Interest cost452 335 905 670 
Net amortization of prior service cost and actuarial loss(16)257 (32)514 
Net periodic pension cost$558 $856 $1,117 $1,712 
Service cost is included in Administrative expense while all other components are recorded within Other expense outside of operating income in the consolidated statements of earnings.
Revenue Recognition
Revenue Recognition – The disaggregation of revenues by business segment for the 13 and 26 weeks ended June 29, 2023 is as follows:
13 Weeks Ended June 29, 2023
TheatresHotels/Resorts CorporateTotal
Theatre admissions$68,987 $— $— $68,987 
Rooms— 28,646 — 28,646 
Theatre concessions59,707 — — 59,707 
Food and beverage— 18,573 — 18,573 
Other revenues(1)
8,156 13,181 91 21,428 
Cost reimbursements— 9,666 — 9,666 
Total revenues$136,850 $70,066 $91 $207,007 
26 Weeks Ended June 29, 2023
TheatresHotels/Resorts CorporateTotal
Theatre admissions$116,622 $— $— $116,622 
Rooms— 46,503 — $46,503 
Theatre concessions102,082 — — $102,082 
Food and beverage— 33,766 — $33,766 
Other revenues(1)
14,522 26,414 180 $41,116 
Cost reimbursements— 19,194 — $19,194 
Total revenues$233,226 $125,877 $180 $359,283 
(1)Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers.
The disaggregation of revenues by business segment for the 13 and 26 weeks ended June 30, 2022 is as follows:
13 Weeks Ended June 30, 2022
TheatresHotels/ResortsCorporateTotal
Theatre admissions$63,087 $— $— $63,087 
Rooms— 28,865 — 28,865 
Theatre concessions58,147 — — 58,147 
Food and beverage— 19,014 — 19,014 
Other revenues(1)
8,203 12,872 117 21,192 
Cost reimbursements— 8,250 — 8,250 
Total revenues$129,437 $69,001 $117 $198,555 
26 Weeks Ended June 30, 2022
TheatresHotels/ResortsCorporateTotal
Theatre admissions$101,504 $— $— $101,504 
Rooms— 46,295 — 46,295 
Theatre concessions93,611 — — 93,611 
Food and beverage— 33,525 — 33,525 
Other revenues(1)
13,813 25,975 211 39,999 
Cost reimbursements— 15,863 — 15,863 
Total revenues$208,928 $121,658 $211 $330,797 
(1)Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers.
The Company had deferred revenue from contracts with customers of $37,670 and $37,046 as of June 29, 2023 and December 29, 2022, respectively. The Company had no contract assets as of June 29, 2023 and December 29, 2022. During the 26 weeks ended June 29, 2023, the Company recognized revenue of $10,875 that was included in deferred revenues as of December 29, 2022. During the 26 weeks ended June 30, 2022, the Company recognized revenue of $9,448 that was included in deferred revenues as of December 30, 2021. The majority of the Company’s deferred revenue relates to non-redeemed gift cards, advanced ticket sales and the Company’s loyalty program.
As of June 29, 2023, the amount of transaction price allocated to the remaining performance obligations under the Company’s advanced ticket sales was $1,980 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues, which is included in other accrued liabilities. As of June 29, 2023, the amount of transaction price allocated to the remaining performance obligations related to the amount of Theatres non-redeemed gift cards was $16,318 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues. The Company recognizes revenue as the tickets and gift cards are redeemed, which is expected to occur within the next two years.
As of June 29, 2023, the amount of transaction price allocated to the remaining performance obligations related to the amount of Hotels and Resorts non-redeemed gift cards was $3,834 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues. The Company recognizes revenue as the gift cards are redeemed, which is expected to occur within the next two years.
The majority of the Company’s revenue is recognized in less than one year from the original contract.
Leases
The Company determines if an arrangement is a lease at inception. The Company evaluates each lease for classification as either a finance lease or an operating lease according to accounting guidance ASU No. 2016-02, Leases (Topic 842). The Company performs this evaluation at the inception of the lease and when a modification is made to a lease. The Company leases real estate and equipment with lease terms of one year to 45 years, some of which include options to extend and/or terminate the lease.
The majority of the Company’s lease agreements include fixed rental payments. For those leases with variable payments based on increases in an index subsequent to lease commencement, such payments are recognized as variable lease expense as they occur. Variable lease payments that do not depend on an index or rate, including those that depend on the Company’s performance or use of the underlying asset, are also expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.