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BASIS OF PRESENTATION | 6 Months Ended
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Jul. 04, 2021
Nature of Business and Significant Accounting Policies |
Basis of Presentation | (1) Basis of Presentation Basis of Presentation In September 2019 a holding company reorganization was completed in which Famous Dave’s of America, Inc. (“FDA”) became a wholly owned subsidiary of the new parent holding company named BBQ Holdings, Inc. (“BBQ Holdings”). As used in this Form 10-K, “Company”, “we” and “our” refer to BBQ Holdings and its wholly owned subsidiaries. BBQ Holdings was incorporated on March 29, 2019 under the laws of the State of Minnesota, while FDA was incorporated in Minnesota on March 14, 1994. The Company develops, owns and operates restaurants under the name “Famous Dave’s”, “Clark Crew BBQ”, “Granite City Food & Brewery”, “Real Urban Barbecue”, “Village Inn” and “ Bakers Square.” Additionally, the Company franchises restaurants under the name “Famous Dave’s”. As of July 4, 2021, there were 127 Famous Dave’s restaurants operating in three countries, including 27 Company-owned restaurants and 100 franchise-operated restaurants. The first Clark Crew BBQ restaurant opened in December 2019 in Oklahoma City, Oklahoma. BBQ Holdings has a 20% ownership in this venture. In March 2020, the Company purchased 18 Granite City Food & Brewery restaurants located throughout the Midwest and one Real Urban Barbecue restaurant located in Vernon Hills, Illinois. On July 30, 2021, the Company completed the purchase of the Village Inn family restaurant concept with 21 Company-owned restaurants and 114 franchised restaurants, and the Bakers Square pie and comfort food concept currently with 13 Company-owned restaurants. These accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and Securities and Exchange Commission (“SEC”) Rules and Regulations. The information furnished in these condensed consolidated financial statements include normal recurring adjustments and reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited financial statements represent the condensed consolidated financial statements of the Company and its subsidiaries as of July 4, 2021 and January 3, 2021, and for the three and six months ended July 4, 2021 and June 28, 2020. The results for the three and six months ended July 4, 2021 are not necessarily indicative of the results to be expected for the full fiscal year or any other interim period. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in BBQ Holding, Inc.’s Annual Report on Form 10-K for the fiscal year ended January 3, 2021 as filed with the SEC on April 2, 2021. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic and the United States declared a National Public Health Emergency. As a result, public health measures were taken to minimize exposure to the virus. These measures, some of which are government-mandated, have been implemented globally resulting in a dramatic decrease in economic activity. During the first quarter of 2021, mandated restrictions began to ease in a number of the markets in which the Company operates. Although the Company has experienced some recovery from the initial impact of COVID-19, the long-term impact of COVID-19 on the economy and on its business remains uncertain, the duration and scope of which cannot currently be predicted. As new variants of COVID-19 are being discovered and cases in unvaccinated people rise throughout the markets in which the Company does business, the Company cannot predict the severity of another surge, what additional restrictions may be enacted, to what extent it can maintain off-premise sales volumes, whether it can maintain sufficient staffing levels, or if individuals will be comfortable returning to its dining rooms during or following social distancing protocols, and what long-lasting effects the COVID-19 pandemic may have on the restaurants industry as a whole. The extent of the reopening process, along with the potential impact of the COVID-19 pandemic on consumer spending behavior, which may be a function of continued concerns over safety and/or depressed consumer sentiment due to adverse economic conditions, including job losses, will determine the significance of the impact to the Company’s operating results and financial position. The full impact of the COVID-19 pandemic continues to evolve as of the date of this report. The duration of the disruption on global, national, and local economies cannot be reasonably estimated at this time due to the ongoing effects of this situation. Management is continually evaluating the impact of this global crisis on its financial condition, liquidity, operations, suppliers, industry, and workforce and will take additional actions as necessary. Reclassifications Certain prior period amounts have been reclassified to conform to the current period’s presentation. These reclassifications did not have an impact on the reported net income for any of the periods presented. Income Taxes The Company maintains a federal deferred tax asset (“DTA”) which was in the amount of $4.6 million as of July 4, 2021 and $4.9 million as of January 3, 2021. The Company evaluates the DTA on a quarterly basis to determine whether current facts and circumstances indicate that the DTA may not be fully realizable. As of July 4, 2021, the Company concluded that the DTA is fully realizable and that no further valuation allowance was necessary; however, the Company will continue to evaluate the DTA on a quarterly basis until the DTA has been fully utilized. The following table presents the Company’s effective tax rates for the periods presented: ​
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​ | ​ | Three Months Ended | ​ | Six Months Ended | ​
​ | ​ | July 4, 2021 | ​ | June 28, 2020 |  | July 4, 2021 |  | June 28, 2020 | ​
Effective tax rate | ​ | ​ | 2.4 | % | ​ | 23.4 | % | ​ | 2.7 | % | ​ | (46.2) | %
​ The Company uses the discrete method to calculate the quarterly tax provision due to its inability to reliably estimate annual ordinary income (loss). The Company provides for income taxes based on its estimate of federal and state income tax liabilities. These estimates include, among other items, effective rates for state and local income taxes, allowable tax credits for items such as taxes paid on reported tip income, estimates related to depreciation and amortization expense allowable for tax purposes, and the tax deductibility of certain other items. The Company’s estimates are based on the information available at the time that the Company prepares the income tax provision. The Company generally files its annual income tax returns several months after its fiscal year-end. Income tax returns are subject to audit by federal, state, and local governments, generally years after the tax returns are filed. These returns could be subject to material adjustments due to differing interpretations of the tax laws. Cash and cash equivalents On May 14, 2020, the Company invested $3.5 million in a certificate of deposit (CD) through Choice Bank. The interest rate on this CD is 3.0%. Interest is compounded every 30 days and the CD automatically renews monthly. This balance is included with cash and cash equivalents on the Company’s balance sheet. Restricted cash and marketing fund The Company has a Marketing Development Fund, to which Company-owned Famous Dave’s restaurants, in addition to the majority of franchise-operated restaurants, contribute a percentage of net sales, for use in public relations and marketing development efforts. The funds held in this account are used in part to reimburse the Company for its marketing and digital services activities on behalf of the Famous Dave’s brand. The Company also receives funds from its suppliers to be used exclusively for point-of-sale equipment purchases for its own stores as well as its franchisees. As the assets held by these funds are considered to be restricted, the Company reflects the cash related to these funds within restricted cash and reflect the liability within accrued expenses on its consolidated balance sheets. The Company had approximately $824,000 and $1.5 million in these funds as of July 4, 2021 and January 3, 2021, respectively. Assets Held for Sale As of July 4, 2021, the Company had assets held for sale of approximately $1.0 million related to an owned property for which it has entered into agreements to sell for a contract purchase price of $2.5 million. Net income per common share Basic net income (loss) per common share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the reporting period. Diluted EPS equals net income divided by the sum of the weighted average number of shares of common stock outstanding plus all additional common stock equivalents, such as stock options and restricted stock units, when dilutive. ​ ​
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​ | Three Months Ended | ​ | Six Months Ended | ​
(in thousands, except per share data) | July 4, 2021 |  | June 28, 2020 |  | July 4, 2021 |  | June 28, 2020 | ​
Net income (loss) per share – basic: | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  | ​
Net income (loss) attributable to shareholders | $ | 15,786 | ​ | $ | (6,252) | ​ | $ | 16,585 | ​ | $ | 7,455 | ​
Weighted average shares outstanding - basic |  | 9,304 | ​ |  | 9,138 | ​ |  | 9,256 | ​ |  | 9,132 | ​
Basic net income (loss) per share attributable to shareholders | $ | 1.70 | ​ | $ | (0.68) | ​ | $ | 1.79 | ​ | $ | 0.82 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income per share – diluted: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​
Net income (loss) attributable to shareholders | $ | 15,786 | ​ | $ | (6,252) | ​ | $ | 16,585 | ​ | $ | 7,455 | ​
Weighted average shares outstanding - diluted |  | 9,615 | ​ |  | 9,138 | ​ |  | 9,567 | ​ |  | 9,132 | ​
Diluted net income (loss) per share attributable to shareholders | $ | 1.64 | ​ | $ | (0.68) | ​ | $ | 1.73 | ​ | $ | 0.82 | ​
​ There were approximately 250 and 299,617 stock options outstanding as of July 4, 2021 and June 28, 2020, respectively, that were not included in the computation of diluted EPS because they were anti-dilutive.

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