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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Rave Restaurant Group Inc | NASDAQ:RAVE | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.11 | -5.29% | 1.97 | 1.88 | 2.25 | 2.09 | 1.95 | 2.09 | 33,289 | 01:00:00 |
Missouri
|
45-3189287
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
Incorporation or organization)
|
Identification No.)
|
Item 1.
|
Financial Statements
|
Page
|
Condensed Consolidated Statements of Operations for the three months and
six months ended December 27, 2015 and December 28, 2014 (unaudited)
|
4
|
|
Condensed Consolidated Balance Sheets at December 27, 2015 (unaudited)
and June 28, 2015
|
5
|
|
Condensed Consolidated Statements of Cash Flows for the six months ended
December 27, 2015 and December 28, 2014 (unaudited)
|
6
|
|
Supplemental Disclosure of Cash Flow Information for the six months ended
December 27, 2015 and December 28, 2014 (unaudited)
|
6
|
|
Notes to Unaudited Condensed Consolidated Financial Statements
|
7
|
|
Item 2.
|
Management's Discussion and Analysis of
Financial Condition and Results of Operations
|
11
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
19
|
Item 4.
|
Controls and Procedures
|
19
|
Item 1.
|
Legal Proceedings
|
19
|
Item 1A.
|
Risk Factors
|
20
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
20
|
Item 3.
|
Defaults Upon Senior Securities
|
20
|
Item 4.
|
Mine Safety Disclosures
|
20
|
Item 5.
|
Other Information
|
20
|
Item 6.
|
Exhibits
|
21
|
Signatures |
22
|
RAVE RESTAURANT GROUP, INC.
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(In thousands, except per share amounts)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 27,
|
December 28,
|
December 27,
|
December 28,
|
|||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
REVENUES:
|
$ | 15,311 | $ | 11,127 | $ | 29,847 | $ | 22,434 | ||||||||
COSTS AND EXPENSES:
|
||||||||||||||||
Cost of sales
|
13,139 | 9,534 | 25,489 | 19,148 | ||||||||||||
General and administrative expenses
|
1,694 | 1,215 | 3,263 | 2,324 | ||||||||||||
Franchise expenses
|
949 | 750 | 1,808 | 1,465 | ||||||||||||
Pre-opening expenses
|
304 | 136 | 736 | 172 | ||||||||||||
Impairment of long-lived assets
|
1,010 | - | 1,010 | - | ||||||||||||
Bad debt
|
128 | 12 | 231 | 92 | ||||||||||||
Interest expense
|
2 | 3 | 3 | 109 | ||||||||||||
Total costs and expenses
|
17,226 | 11,650 | 32,540 | 23,310 | ||||||||||||
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES
|
(1,915 | ) | (523 | ) | (2,693 | ) | (876 | ) | ||||||||
Income tax expense (benefit)
|
2,892 | (167 | ) | 2,634 | (282 | ) | ||||||||||
LOSS FROM CONTINUING OPERATIONS
|
(4,807 | ) | (356 | ) | (5,327 | ) | (594 | ) | ||||||||
Loss from discontinued operations, net of taxes
|
(23 | ) | (43 | ) | (60 | ) | (70 | ) | ||||||||
NET LOSS
|
$ | (4,830 | ) | $ | (399 | ) | $ | (5,387 | ) | $ | (664 | ) | ||||
LOSS PER SHARE OF COMMON STOCK - BASIC:
|
||||||||||||||||
Loss from continuing operations
|
$ | (0.47 | ) | $ | (0.04 | ) | $ | (0.52 | ) | $ | (0.06 | ) | ||||
Loss from discontinued operations
|
- | - | - | (0.01 | ) | |||||||||||
Net loss
|
$ | (0.47 | ) | $ | (0.04 | ) | $ | (0.52 | ) | $ | (0.07 | ) | ||||
LOSS PER SHARE OF COMMON STOCK - DILUTED:
|
||||||||||||||||
Loss from continuing operations
|
$ | (0.45 | ) | $ | (0.04 | ) | $ | (0.50 | ) | $ | (0.06 | ) | ||||
Loss from discontinued operations
|
- | - | - | (0.01 | ) | |||||||||||
Net loss
|
$ | (0.45 | ) | $ | (0.04 | ) | $ | (0.50 | ) | $ | (0.07 | ) | ||||
Weighted average common shares outstanding - basic
|
10,314 | 9,393 | 10,310 | 9,392 | ||||||||||||
Weighted average common and
|
||||||||||||||||
potential dilutive common shares outstanding
|
10,770 | 9,895 | 10,859 | 9,905 |
RAVE RESTAURANT GROUP, INC.
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
(In thousands, except share amounts)
|
||||||||
December 27,
|
June 28,
|
|||||||
ASSETS
|
2015 (unaudited)
|
2015
|
||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 1,747 | 5,958 | |||||
Accounts receivable, less allowance for bad debts
|
||||||||
accounts of $379 and $193, respectively
|
3,075 | 3,437 | ||||||
Notes receivable
|
170 | 24 | ||||||
Inventories
|
234 | 180 | ||||||
Income tax receivable
|
212 | 492 | ||||||
Deferred income tax assets
|
- | 729 | ||||||
Prepaid expenses and other
|
717 | 872 | ||||||
Total current assets
|
6,155 | 11,692 | ||||||
LONG-TERM ASSETS
|
||||||||
Property, plant and equipment, net
|
14,349 | 10,020 | ||||||
Long-term notes receivable
|
170 | 119 | ||||||
Long-term deferred tax asset
|
- | 1,864 | ||||||
Deposits and other
|
293 | 276 | ||||||
Total assets
|
$ | 20,967 | $ | 23,971 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable - trade
|
$ | 4,132 | 2,875 | |||||
Accrued expenses
|
930 | 1,267 | ||||||
Deferred rent
|
163 | 155 | ||||||
Deferred revenues
|
266 | 374 | ||||||
Total current liabilities
|
5,491 | 4,671 | ||||||
LONG-TERM LIABILITIES
|
||||||||
Deferred rent, net of current portion
|
1,311 | 893 | ||||||
Deferred revenues, net of current portion
|
1,448 | 1,166 | ||||||
Deferred gain on sale of property
|
- | 9 | ||||||
Other long-term liabilities
|
31 | 22 | ||||||
Total liabilities
|
8,281 | 6,761 | ||||||
COMMITMENTS AND CONTINGENCIES (See Note 2)
|
||||||||
SHAREHOLDERS' EQUITY
|
||||||||
Common stock, $.01 par value; authorized 26,000,000
|
||||||||
shares; issued 17,433,035 and 17,374,735 shares, respectively;
|
||||||||
outstanding 10,313,635 and 10,255,335 shares, respectively
|
174 | 174 | ||||||
Additional paid-in capital
|
25,563 | 24,700 | ||||||
Retained earnings
|
11,585 | 16,972 | ||||||
Treasury stock at cost
|
(24,636 | ) | (24,636 | ) | ||||
Shares in treasury: 7,119,400
|
||||||||
Total shareholders' equity
|
12,686 | 17,210 | ||||||
$ | 20,967 | $ | 23,971 |
RAVE RESTAURANT GROUP, INC.
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(In thousands)
|
||||||||
(Unaudited)
|
||||||||
Six Months Ended
|
||||||||
December 27,
|
December 28,
|
|||||||
2015
|
2014
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$ | (5,387 | ) | $ | (664 | ) | ||
Adjustments to reconcile net loss to
|
||||||||
cash provided by (used in) operating activities:
|
||||||||
Depreciation and amortization
|
1,118 | 741 | ||||||
Impairment of long-lived assets
|
1,010 | - | ||||||
Stock compensation expense
|
90 | 53 | ||||||
Deferred income taxes
|
2,593 | (340 | ) | |||||
Loss on sale of assets
|
2 | - | ||||||
Provision for bad debt
|
231 | 92 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Notes and accounts receivable
|
214 | 438 | ||||||
Inventories
|
(54 | ) | 259 | |||||
Accounts payable - trade
|
1,257 | (790 | ) | |||||
Accrued expenses
|
98 | 58 | ||||||
Deferred revenue
|
165 | 501 | ||||||
Prepaid expenses and other
|
136 | (376 | ) | |||||
Cash provided by (used in) operating activities
|
1,473 | (28 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of assets
|
14 | - | ||||||
Capital expenditures
|
(6,471 | ) | (1,564 | ) | ||||
Cash used in investing activities
|
(6,457 | ) | (1,564 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from sale of stock
|
773 | 1,752 | ||||||
Repayments of bank debt
|
- | (767 | ) | |||||
Cash provided by financing activities
|
773 | 985 | ||||||
Net decrease in cash and cash equivalents
|
(4,211 | ) | (607 | ) | ||||
Cash and cash equivalents, beginning of period
|
5,958 | 2,796 | ||||||
Cash and cash equivalents, end of period
|
$ | 1,747 | $ | 2,189 | ||||
|
||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
CASH PAYMENTS FOR:
|
||||||||
Interest
|
$ | 1 | $ | 12 |
(1)
|
Summary of Significant Accounting Policies
|
|
Principles of Consolidation
|
|
Cash and Cash Equivalents
|
(2)
|
Commitments and Contingencies
|
|
Six Months Ended
|
|||||||
|
December 27, 2015
|
December 28, 2014
|
||||||
Outstanding at beginning of year
|
871,798 | 921,198 | ||||||
Granted
|
42,786 | 108,800 | ||||||
Exercised
|
- | (77,000 | ) | |||||
Forfeited/Canceled/Expired
|
- | - | ||||||
Outstanding at end of period
|
914,584 | 952,998 | ||||||
Exercisable at end of period
|
551,028 | 478,823 |
(4)
|
Earnings per Share (EPS)
|
|
The following table shows the reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation (in thousands, except per share amounts).
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 27,
|
December 28,
|
December 27,
|
December 28,
|
|||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Loss from continuing operations
|
$ | (4,807 | ) | $ | (356 | ) | $ | (5,327 | ) | $ | (594 | ) | ||||
Loss from discontinued operations
|
(23 | ) | (43 | ) | (60 | ) | (70 | ) | ||||||||
Net loss available to common stockholders
|
$ | (4,830 | ) | $ | (399 | ) | $ | (5,387 | ) | $ | (664 | ) | ||||
BASIC:
|
||||||||||||||||
Weighted average common shares
|
10,314 | 9,393 | 10,310 | 9,392 | ||||||||||||
Loss from continuing operations per common share
|
$ | (0.47 | ) | $ | (0.04 | ) | $ | (0.52 | ) | $ | (0.06 | ) | ||||
Loss from discontinued operations per common share
|
- | - | - | (0.01 | ) | |||||||||||
Net loss per common share
|
$ | (0.47 | ) | $ | (0.04 | ) | $ | (0.52 | ) | $ | (0.07 | ) | ||||
DILUTED:
|
||||||||||||||||
Weighted average common shares
|
10,314 | 9,393 | 10,310 | 9,392 | ||||||||||||
Stock options
|
456 | 502 | 549 | 513 | ||||||||||||
Weighted average common shares outstanding
|
10,770 | 9,895 | 10,859 | 9,905 | ||||||||||||
Loss from continuing operations per common share
|
$ | (0.45 | ) | $ | (0.04 | ) | $ | (0.50 | ) | $ | (0.06 | ) | ||||
Loss from discontinued operations per common share
|
- | - | - | (0.01 | ) | |||||||||||
Net loss per common share
|
$ | (0.45 | ) | $ | (0.04 | ) | $ | (0.50 | ) | $ | (0.07 | ) |
|
For the three months ended December 27, 2015, options to purchase 24,286 shares of common stock at an exercise price of $13.11, 15,000 shares at $8.16 and 48,500 shares at $8.05 were excluded from the computation of diluted EPS because the options’ exercise price exceeded the average market price of the common shares for the period.
|
|
Discontinued operations reflect losses from two Company-owned Pizza Inn locations in Texas. These losses were attributable to leasehold expense associated with a restaurant closed during fiscal 2008 and operating results for a restaurant closed in the fourth quarter of fiscal 2014.
|
(8)
|
Segment Reporting
|
|
Summarized in the following tables are net sales and operating revenues, operating income and geographic information (revenues) for the Company’s reportable segments for the three and six month periods ended December 27, 2015 and December 28, 2014 (in thousands). Operating income reported below excludes income tax provision and discontinued operations.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
|
December 27,
|
December 28,
|
December 27,
|
December 28,
|
||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net sales and operating revenues:
|
||||||||||||||||
Franchising and food and supply distribution
|
$ | 10,227 | $ | 8,331 | $ | 20,139 | $ | 16,817 | ||||||||
Company-owned restaurants (1)
|
5,084 | 2,796 | 9,708 | 5,617 | ||||||||||||
Consolidated revenues
|
$ | 15,311 | $ | 11,127 | $ | 29,847 | $ | 22,434 | ||||||||
Depreciation and amortization:
|
||||||||||||||||
Franchising and food and supply distribution
|
$ | 6 | $ | 6 | $ | 12 | $ | 11 | ||||||||
Company-owned restaurants (1)
|
575 | 303 | 1,018 | 624 | ||||||||||||
Combined
|
581 | 309 | 1,030 | 635 | ||||||||||||
Corporate administration and other
|
20 | 56 | 88 | 106 | ||||||||||||
Depreciation and amortization
|
$ | 601 | $ | 365 | $ | 1,118 | $ | 741 | ||||||||
Loss from continuing operations before taxes:
|
||||||||||||||||
Franchising and food and supply distribution (2)
|
$ | 895 | $ | 387 | $ | 1,528 | $ | 808 | ||||||||
Company-owned restaurants (1) (2)
|
(1,057 | ) | (343 | ) | (1,720 | ) | (444 | ) | ||||||||
Combined
|
(162 | ) | 44 | (192 | ) | 364 | ||||||||||
Impairment of long-lived assets
|
(1,010 | ) | - | (1,010 | ) | - | ||||||||||
Corporate administration and other (2)
|
(743 | ) | (567 | ) | (1,491 | ) | (1,240 | ) | ||||||||
Loss from continuing operations before taxes
|
$ | (1,915 | ) | $ | (523 | ) | $ | (2,693 | ) | $ | (876 | ) | ||||
Geographic information (revenues):
|
||||||||||||||||
United States
|
$ | 15,122 | $ | 10,969 | $ | 29,457 | $ | 22,109 | ||||||||
Foreign countries
|
189 | 158 | 390 | 325 | ||||||||||||
Consolidated total
|
$ | 15,311 | $ | 11,127 | $ | 29,847 | $ | 22,434 |
(1)
|
Company stores that were closed are included in discontinued
|
||||
operations in the accompanying Condensed Consolidated Statement
|
|||||
of Operations.
|
|||||
(2)
|
Portions of corporate administration and other have been allocated to segments.
|
Three Months Ended December 27, 2015
|
|
(in thousands, except unit data)
|
Pizza Inn
|
Pie Five
|
All Concepts
|
||||||||||||||||||||||
Ending
|
Retail
|
Ending
|
Retail
|
Ending
|
Retail
|
|||||||||||||||||||
Units
|
Sales
|
Units
|
Sales
|
Units
|
Sales
|
|||||||||||||||||||
Company-Owned
|
1 | $ | 208 | 33 | $ | 4,876 | 34 | $ | 5,084 | |||||||||||||||
Domestic Franchised
|
166 | 21,328 | 49 | 8,091 | 215 | 29,419 | ||||||||||||||||||
Total Domestic Units
|
167 | $ | 21,536 | 82 | $ | 12,967 | 249 | $ | 34,503 | |||||||||||||||
International Franchised
|
71 | - | 71 |
Six Months Ended December 27, 2015
|
(in thousands, except unit data)
|
Pizza Inn
|
Pie Five
|
All Concepts
|
||||||||||||||||||||||
Ending
|
Retail
|
Ending
|
Retail
|
Ending
|
Retail
|
|||||||||||||||||||
Units
|
Sales
|
Units
|
Sales
|
Units
|
Sales
|
|||||||||||||||||||
Company-Owned
|
1 | $ | 439 | 33 | $ | 9,269 | 34 | $ | 9,708 | |||||||||||||||
Domestic Franchised
|
166 | 43,556 | 49 | 14,803 | 215 | 58,359 | ||||||||||||||||||
Total Domestic Units
|
167 | $ | 43,995 | 82 | $ | 24,072 | 249 | $ | 68,067 | |||||||||||||||
International Franchised
|
71 | - | 71 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 27,
|
December 28,
|
December 27,
|
December 28,
|
|||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net loss
|
$ | (4,830 | ) | $ | (399 | ) | $ | (5,387 | ) | $ | (664 | ) | ||||
Interest expense
|
2 | 3 | 3 | 109 | ||||||||||||
Income Taxes
|
2,892 | (167 | ) | 2,634 | (282 | ) | ||||||||||
Income Taxes--Discontinued Operations
|
(12 | ) | (19 | ) | (31 | ) | (34 | ) | ||||||||
Depreciation and amortization
|
601 | 365 | 1,118 | 741 | ||||||||||||
EBITDA
|
$ | (1,347 | ) | $ | (217 | ) | $ | (1,663 | ) | $ | (130 | ) | ||||
Stock compensation expense
|
45 | 30 | 90 | 53 | ||||||||||||
Pre-opening costs
|
304 | 136 | 736 | 172 | ||||||||||||
Asset disposals, closure costs and restaurant impairment
|
1,059 | 56 | 1,126 | 113 | ||||||||||||
Adjusted EBITDA
|
$ | 61 | $ | 5 | $ | 289 | $ | 208 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 27,
|
December 28,
|
December 27,
|
December 28,
|
|||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(in thousands, except unit data)
|
(in thousands, except unit data)
|
|||||||||||||||
Pie Five Retail Sales - Total Stores
|
||||||||||||||||
Domestic - Franchised
|
$ | 8,091 | $ | 2,724 | $ | 14,803 | $ | 4,520 | ||||||||
Domestic - Company-owned
|
4,876 | 2,438 | 9,269 | 4,842 | ||||||||||||
Total domestic retail sales
|
$ | 12,967 | $ | 5,162 | $ | 24,072 | $ | 9,362 | ||||||||
Pie Five Comparable Store Retail Sales - Total
|
$ | 3,078 | $ | 3,127 | $ | 6,288 | $ | 6,291 | ||||||||
Pie Five Average Units Open in Period
|
||||||||||||||||
Domestic - Franchised
|
42 | 12 | 37 | 10 | ||||||||||||
Domestic - Company-owned
|
32 | 14 | 29 | 14 | ||||||||||||
Total domestic Units
|
74 | 26 | 66 | 24 |
Three Months Ended December 27, 2015
|
Six Months Ended December 27, 2015
|
|||||||||||||||||||||||||||||||
Beginning
|
Ending
|
Beginning
|
Ending
|
|||||||||||||||||||||||||||||
Units
|
Opened
|
Closed
|
Units
|
Units
|
Opened
|
Closed
|
Units
|
|||||||||||||||||||||||||
Domestic - Franchised
|
38 | 11 | - | 49 | 30 | 19 | - | 49 | ||||||||||||||||||||||||
Domestic - Company-owned
|
30 | 3 | - | 33 | 24 | 9 | - | 33 | ||||||||||||||||||||||||
Total domestic Units
|
68 | 14 | - | 82 | 54 | 28 | - | 82 |
Pie Five - Company-Owned Restaurants
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
(in thousands, except store weeks and average data)
|
December 27,
|
December 28,
|
December 27,
|
December 28,
|
||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Store weeks
|
414 | 183 | 741 | 352 | ||||||||||||
Average weekly sales
|
11,725 | 13,322 | 12,418 | 13,759 | ||||||||||||
Average number of units
|
32 | 14 | 29 | 14 | ||||||||||||
Restaurant sales (excluding partial weeks)
|
4,854 | 2,427 | 9,202 | 4,827 | ||||||||||||
Restaurant sales
|
4,876 | 2,438 | 9,269 | 4,843 | ||||||||||||
Restaurant operating cash flow
|
241 | 330 | 868 | 742 | ||||||||||||
Allocated marketing and advertising expenses
|
(243 | ) | (122 | ) | (463 | ) | (242 | ) | ||||||||
Depreciation/amortization expense
|
(568 | ) | (267 | ) | (998 | ) | (540 | ) | ||||||||
Pre-opening costs
|
(264 | ) | (137 | ) | (688 | ) | (150 | ) | ||||||||
Operations management and extraordinary expenses
|
(172 | ) | (100 | ) | (336 | ) | (163 | ) | ||||||||
Impairment of long-lived assets
|
(1,010 | ) | - | (1,010 | ) | - | ||||||||||
Loss from continuing operations before taxes
|
(2,016 | ) | (296 | ) | (2,627 | ) | (353 | ) |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 27,
|
December 28,
|
December 27,
|
December 28,
|
|||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Pizza Inn Retail Sales - Total Domestic Stores
|
(in thousands, except unit data)
|
(in thousands, except unit data)
|
||||||||||||||
Domestic Units
|
||||||||||||||||
Buffet - Franchised
|
$ | 19,486 | $ | 19,775 | $ | 39,755 | $ | 40,580 | ||||||||
Delco/Express - Franchised
|
1,842 | 2,050 | 3,801 | 4,213 | ||||||||||||
Buffet - Company-owned
|
208 | 358 | 439 | 774 | ||||||||||||
Total domestic retail sales
|
$ | 21,536 | $ | 22,183 | $ | 43,995 | $ | 45,567 | ||||||||
Pizza Inn Comparable Store Retail Sales - Total Domestic
|
$ | 20,853 | $ | 21,221 | $ | 42,722 | $ | 43,346 | ||||||||
Pizza Inn Average Units Open in Period
|
||||||||||||||||
Domestic Units
|
||||||||||||||||
Buffet - Franchised
|
96 | 98 | 97 | 99 | ||||||||||||
Delco/Express - Franchised
|
69 | 77 | 70 | 77 | ||||||||||||
Buffet - Company-owned
|
1 | 2 | 1 | 2 | ||||||||||||
Total domestic Units
|
166 | 177 | 168 | 178 |
Three Months Ended December 27, 2015
|
Six Months Ended December 27, 2015
|
|||||||||||||||||||||||||||||||
Beginning
|
Ending
|
Beginning
|
Ending
|
|||||||||||||||||||||||||||||
Units
|
Opened
|
Closed
|
Units
|
Units
|
Opened
|
Closed
|
Units
|
|||||||||||||||||||||||||
Domestic Units
|
||||||||||||||||||||||||||||||||
Buffet - Franchised
|
97 | - | 3 | 94 | 99 | - | 5 | 94 | ||||||||||||||||||||||||
Delco/Express - Franchised
|
73 | 1 | 2 | 72 | 78 | 1 | 7 | 72 | ||||||||||||||||||||||||
Buffet - Company-owned
|
1 | - | - | 1 | 2 | - | 1 | 1 | ||||||||||||||||||||||||
Total domestic Units
|
171 | 1 | 5 | 167 | 179 | 1 | 13 | 167 | ||||||||||||||||||||||||
International Units (all types)
|
71 | - | - | 71 | 71 | - | - | 71 | ||||||||||||||||||||||||
Total Units
|
242 | 1 | 5 | 238 | 250 | 1 | 13 | 238 |
·
|
“EBITDA” represents earnings before interest, taxes, depreciation and amortization.
|
·
|
“Adjusted EBITDA” represents earnings before interest, taxes, depreciation and amortization, stock compensation expense, pre-opening expense, gain/loss on sale of assets, costs related to closed restaurants and impairment charges.
|
·
|
“Retail sales” represents the restaurant sales reported by our franchisees and Company-owned restaurants, which may be segmented by brand or domestic/international locations.
|
·
|
“System-wide retail sales” represents combined retail sales for franchisee and Company-owned restaurants for a specified brand.
|
·
|
“Comparable store retail sales” includes the retail sales for restaurants that have been open for at least 18 months as of the end of the reporting period. The sales results for a restaurant that was closed temporarily for remodeling or relocation within the same trade area are included in the calculation only for the days that the restaurant was open in both periods being compared.
|
·
|
“Store weeks” represent the total number of full weeks that specified restaurants were open during the period.
|
·
|
“Average units open” reflects the number of restaurants open during a reporting period weighted by the percentage of the weeks in a reporting period that each restaurant was open.
|
·
|
“Average weekly sales” for a specified period is calculated as total retail sales (excluding partial weeks) divided by store weeks in the period.
|
·
|
“Restaurant operating cash flow” represents the pre-tax income earned by Company-owned restaurants before (1) allocated marketing and advertising expenses, (2) depreciation and amortization, (3) pre-opening expenses, (4) operations management and extraordinary expenses and (5) deferred rent adjustment (net) and impairment.
|
·
|
“Pre-opening expenses” consist primarily of certain costs incurred prior to the opening of a restaurant, including: (1) marketing and promotional expenses, (2) accrued rent, and (3) manager salaries, employee payroll and related training costs..
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 27,
|
December 28,
|
December 27,
|
December 28,
|
|||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Food and supply sales
|
$ | 8,785 | $ | 7,263 | $ | 17,424 | $ | 14,731 | ||||||||
Franchise revenue
|
1,442 | 1,068 | 2,715 | 2,086 | ||||||||||||
Restaurant sales
|
5,084 | 2,796 | 9,708 | 5,617 | ||||||||||||
Total revenue
|
$ | 15,311 | $ | 11,127 | $ | 29,847 | $ | 22,434 |
RAVE RESTAURANT GROUP, INC.
(Registrant)
By: /s/ Randall E. Gier
Randall E. Gier
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Timothy E. Mullany
Timothy E. Mullany
Chief Financial Officer
(Principal Financial Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Rave Restaurant Group, Inc. (“the Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: February 10, 2016
|
By:
|
/s/ Randall E. Gier
Randall E. Gier
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Rave Restaurant Group, Inc. (“the Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: February 10, 2016
|
By:
|
/s/ Timothy E. Mullany
Timothy E. Mullany
Chief Financial Officer
(Principal Financial Officer)
|
Date: February 10, 2016
|
By:
|
/s/ Randall E. Gier
Randall E. Gier
President and Chief
Executive Officer
(Principal Executive Officer)
|
Date: February 10, 2016
|
By:
|
/s/ Timothy E. Mullany
Timothy E. Mullany
Chief Financial Officer
(Principal Financial Officer)
|
|
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Dec. 27, 2015 |
Feb. 10, 2016 |
|
Document and Entity Information: | ||
Entity Registrant Name | RAVE RESTAURANT GROUP, INC. | |
Entity Trading Symbol | rave | |
Document Type | 10-Q | |
Document Period End Date | Dec. 27, 2015 | |
Amendment Flag | false | |
Entity Central Index Key | 0000718332 | |
Current Fiscal Year End Date | --06-26 | |
Entity Common Stock, Shares Outstanding | 10,313,635 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICALS - USD ($) $ in Thousands |
Dec. 27, 2015 |
Jun. 28, 2015 |
---|---|---|
Parentheticals | ||
Allowance for bad debts accounts | $ 379 | $ 193 |
Common Stock, Par Value | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 26,000,000 | 26,000,000 |
Common Stock, Shares Issued | 17,433,035 | 17,374,735 |
Common Stock, Shares Outstanding | 10,313,635 | 10,255,335 |
Treasury Stock, shares | 7,119,400 | 7,119,400 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 27, 2015 |
Dec. 28, 2014 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Revenue | ||||
REVENUES: | $ 15,311 | $ 11,127 | $ 29,847 | $ 22,434 |
COSTS AND EXPENSES: | ||||
Cost of sales | 13,139 | 9,534 | 25,489 | 19,148 |
General and administrative expenses | 1,694 | 1,215 | 3,263 | 2,324 |
Franchise expenses | 949 | 750 | 1,808 | 1,465 |
Pre-opening expenses | 304 | 136 | 736 | 172 |
Impairment of long-lived assets | 1,010 | 0 | 1,010 | 0 |
Bad debt | 128 | 12 | 231 | 92 |
Interest expense | 2 | 3 | 3 | 109 |
Total costs and expenses | 17,226 | 11,650 | 32,540 | 23,310 |
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES | (1,915) | (523) | (2,693) | (876) |
Income tax expense (benefit) | 2,892 | (167) | 2,634 | (282) |
LOSS FROM CONTINUING OPERATIONS | (4,807) | (356) | (5,327) | (594) |
Loss from discontinued operations, net of taxes | (23) | (43) | (60) | (70) |
NET LOSS | $ (4,830) | $ (399) | $ (5,387) | $ (664) |
LOSS PER SHARE OF COMMON STOCK - BASIC: | ||||
Loss from continuing operations | $ (0.47) | $ (0.04) | $ (0.52) | $ (0.06) |
Loss from discontinued operations | 0.00 | 0.00 | 0.00 | (0.01) |
Net loss | (0.47) | (0.04) | (0.52) | (0.07) |
LOSS PER SHARE OF COMMON STOCK - DILUTED: | ||||
Loss from continuing operations | (0.45) | (0.04) | (0.50) | (0.06) |
Loss from discontinued operations | 0.00 | 0.00 | 0.00 | (0.01) |
Net loss | $ (0.45) | $ (0.04) | $ (0.50) | $ (0.07) |
Weighted average common shares outstanding - basic | 10,314 | 9,393 | 10,310 | 9,392 |
Weighted average common and potential dilutive common shares outstanding | 10,770 | 9,895 | 10,859 | 9,905 |
Summary of Significant Accounting Policies |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 27, 2015 | |||||||
Summary of Significant Accounting Policies | |||||||
Summary of Significant Accounting Policies |
The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All appropriate intercompany balances and transactions have been eliminated.
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Fiscal Quarters The three and six month periods ended December 27, 2015 and December 28, 2014, each contained 13 weeks and 26 weeks, respectively. Revenue Recognition The Company recognizes revenue when products are delivered and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. The Company's Norco division sells food and supplies to franchisees on trade accounts under terms common in the industry. Food and supply sales revenues, including shipping and handling costs, are recognized upon delivery of the product. Revenue from restaurant sales is recognized when food and beverage products are sold. The Company reports revenue net of sales taxes collected from customers and remitted to governmental taxing authorities.
Franchise revenue consists of income from license fees, royalties, and area development and foreign master license fees. License fees are recognized as income when there has been substantial performance under the agreement by the Company. Domestic license fees are generally recognized at the time the restaurant is opened. Foreign master license fees are generally recognized upon execution of the agreement as all material services relating to the sale have been substantially performed by the Company and the fee has been collected. Royalties are recognized as income when earned.
Stock-Based Compensation The Company accounts for stock options using the fair value recognition provisions of the authoritative guidance on share-based payments. The Company uses the Black-Scholes formula to estimate the value of stock-based compensation for options granted to employees and directors and expects to continue to use this acceptable option valuation model in the future. The authoritative guidance also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow.
Use of Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires the Companys management to make estimates and assumptions that affect its reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. The Company bases its estimates on historical experience and other various assumptions that it believes are reasonable under the circumstances. Estimates and assumptions are reviewed periodically and actual results could differ materially from estimates.
Reclassification Certain items have been reclassified in the prior year financial statements to conform to current year presentation.
|
Commitments and Contingencies |
6 Months Ended | ||
---|---|---|---|
Dec. 27, 2015 | |||
Commitments and Contingencies {1} | |||
Commitments and Contingencies |
On April 22, 2009, the Companys board of directors amended the stock purchase plan first adopted on May 23, 2007, and previously amended on June 2, 2008, to increase the number of shares of common stock the Company may repurchase to a total of 3,016,000 shares. As of December 27, 2015, up to an additional 848,425 shares could be purchased under the plan.
The Company is subject to various claims and legal actions in the ordinary course of its business. The Company believes that all such claims and actions currently pending against it are either adequately covered by insurance or would not have a material adverse effect on the Companys annual results of operations, cash flows or financial condition if decided in a manner that is unfavorable to the Company.
|
Stock-Based Compensation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 27, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | (3) Stock-Based Compensation
For the three months ended December 27, 2015, and December 28, 2014, the Company recognized stock-based compensation expense of $45,000 and $30,000, respectively. For the six month period ended December 27, 2015, and December 28, 2014, the Company recognized stock-based compensation expense of $90,000 and $53,000, respectively. As of December 27, 2015, unamortized stock-based compensation expense was $0.3 million.
The following table summarizes the number of shares of the Companys common stock subject to outstanding stock options:
|
Earnings per Share (EPS) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 27, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share (EPS) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share (EPS) |
|
Closed restaurants and discontinued operations |
6 Months Ended | ||
---|---|---|---|
Dec. 27, 2015 | |||
Closed restaurants and discontinued operations: | |||
Closed restaurants and discontinued operations | (5) Closed restaurants and discontinued operations
In April, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which modifies the definition of discontinued operations to include only disposals of an entity that represent strategic shifts that have or will have a major effect on an entitys operation and requires entities to disclose information about disposals of individually significant components that do not meet the definition of discontinued operations. The standard is effective prospectively for annual and interim periods beginning after December 15, 2014, with early adoption permitted. This pronouncement did not have a material impact on our condensed consolidated financial statements.
The authoritative guidance on Accounting for Costs Associated with Exit or Disposal Activities, requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. This authoritative guidance also establishes that fair value is the objective for initial measurement of the liability.
|
Income Taxes |
6 Months Ended |
---|---|
Dec. 27, 2015 | |
Income Taxes | |
Income Taxes | (6) Income Taxes
The Company accounts for income taxes under the provisions of ASC 740, Accounting for Income Taxes. Under ASC 740, deferred tax assets and liabilities for the expected future tax consequences of transactions and events are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company has open tax years for the U.S. federal return from fiscal year 2012 forward and fiscal year 2011 for various state purposes.
Accounting Standards Update No. 2105-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, issued on November 20, 2015, eliminates the requirement for entities that present a classified statement of financial position to classify deferred tax assets and liabilities as current and noncurrent, and instead require that they classify all deferred tax assets and liabilities as noncurrent. The Company is making an early adoption of this accounting standard on a prospective basis.
The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In the second quarter of fiscal year 2016, the Company recorded a $3.5 million valuation allowance against its net deferred tax assets. The Company assessed whether a valuation allowance should be established against its deferred tax assets based on consideration of all available evidence, using a more likely than not standard. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of deferred tax assets. In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses. Future sources of taxable income were also considered in determining the amount of the recorded valuation allowance. Based on the Companys review of this evidence, management determined that a full valuation allowance against all of the Companys deferred tax assets at December 27, 2015 was appropriate. |
Related Party Transactions |
6 Months Ended |
---|---|
Dec. 27, 2015 | |
Related Party Transactions: | |
Related Party Transactions | 7) Related Party Transactions
On February 20, 2014, the Company entered into an Advisory Services Agreement (the Agreement) with NCM Services, Inc. (NCMS) pursuant to which NCMS will provide certain advisory and consulting services to the Company. NCMS is indirectly owned and controlled by Mark E. Schwarz, the Chairman of the Company. The term of the Agreement commenced December 30, 2013, and continues quarterly thereafter until terminated by either party. Pursuant to the Agreement, NCMS was paid an initial fee of $150,000 and earns quarterly fees of $50,000 and an additional fee of up to $50,000 per quarter (not to exceed an aggregate of $100,000 in additional fees). The quarterly and additional fees are waived if the Company is not in compliance with all financial covenants under its primary credit facility or to the extent that payment of those fees would result in non-compliance with such financial covenants.
|
Segment Reporting |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 27, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting |
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Accounting Policies (Policies) |
6 Months Ended | ||
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Dec. 27, 2015 | |||
Accounting Policies: | |||
Principles of Consolidation |
The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All appropriate intercompany balances and transactions have been eliminated.
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Cash and Cash Equivalents |
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
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Fiscal Quarters | Fiscal Quarters The three and six month periods ended December 27, 2015 and December 28, 2014, each contained 13 weeks and 26 weeks, respectively. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue when products are delivered and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. The Company's Norco division sells food and supplies to franchisees on trade accounts under terms common in the industry. Food and supply sales revenues, including shipping and handling costs, are recognized upon delivery of the product. Revenue from restaurant sales is recognized when food and beverage products are sold. The Company reports revenue net of sales taxes collected from customers and remitted to governmental taxing authorities.
Franchise revenue consists of income from license fees, royalties, and area development and foreign master license fees. License fees are recognized as income when there has been substantial performance under the agreement by the Company. Domestic license fees are generally recognized at the time the restaurant is opened. Foreign master license fees are generally recognized upon execution of the agreement as all material services relating to the sale have been substantially performed by the Company and the fee has been collected. Royalties are recognized as income when earned.
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Stock-Based Compensation, Policy | Stock-Based Compensation The Company accounts for stock options using the fair value recognition provisions of the authoritative guidance on share-based payments. The Company uses the Black-Scholes formula to estimate the value of stock-based compensation for options granted to employees and directors and expects to continue to use this acceptable option valuation model in the future. The authoritative guidance also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow.
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Use of Management Estimates | Use of Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires the Companys management to make estimates and assumptions that affect its reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. The Company bases its estimates on historical experience and other various assumptions that it believes are reasonable under the circumstances. Estimates and assumptions are reviewed periodically and actual results could differ materially from estimates.
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Reclassification | Reclassification Certain items have been reclassified in the prior year financial statements to conform to current year presentation.
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Schedule of Summary of Outstanding Stock Options (Tables) |
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Dec. 27, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summary of Outstanding Stock Options | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summary of Outstanding Stock Options | The following table summarizes the number of shares of the Companys common stock subject to outstanding stock options:
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Schedule of reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation (Tables) |
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Schedule of reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted |
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Schedule of Summary of Income, Revenues and Geographic Information for Company's reportable segments (Tables) |
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Schedule of Summary of Income, Revenues and Geographic Information for Company's reprtable segments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment |
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Commitments and Contingencies (Details) - shares |
Dec. 27, 2015 |
Apr. 22, 2009 |
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Commitments and Contingencies Details | ||
Common stock shares may be repurchased | 3,016,000 | |
Additional shares could be purchased the plan | 848,425 |
Stock-Based Compensation (Narrative) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 27, 2015 |
Dec. 28, 2014 |
Dec. 27, 2015 |
Dec. 28, 2014 |
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Stock-Based Compensation Narrative Details | ||||
Stock-based compensation recognized | $ 45,000 | $ 30,000 | $ 90,000 | $ 53,000 |
Unamortized stock-based compensation expense | $ 300,000 | $ 300,000 |
Stock-Based Compensation (Details) - shares |
6 Months Ended | |
---|---|---|
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Stock-Based Compensation Details | ||
Outstanding at beginning of year | 871,798 | 921,198 |
Granted | 42,786 | 108,800 |
Exercised | 0 | (77,000) |
Forfeited/Canceled/Expired | 0 | 0 |
Outstanding at end of period | 914,584 | 952,998 |
Exercisable at end of period | 551,028 | 478,823 |
Earnings per Share (EPS) (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 27, 2015 |
Dec. 28, 2014 |
Dec. 27, 2015 |
Dec. 28, 2014 |
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Earnings per Share (EPS) Details | ||||
Loss from continuing operations | $ (4,807) | $ (356) | $ (5,327) | $ (594) |
Loss from discontinued operations | (23) | (43) | (60) | (70) |
Net loss available to common stockholders | $ (4,830) | $ (399) | $ (5,387) | $ (664) |
BASIC: | ||||
Weighted average common shares | 10,314 | 9,393 | 10,310 | 9,392 |
Loss from continuing operations per common share | $ (0.47) | $ (0.04) | $ (0.52) | $ (0.06) |
Loss from discontinued operations per common share | 0.00 | 0.00 | 0.00 | (0.01) |
Net loss per common share | $ (0.47) | $ (0.04) | $ (0.52) | $ (0.07) |
DILUTED: | ||||
Weighted average common shares | 10,314 | 9,393 | 10,310 | 9,392 |
Stock options | 456 | 502 | 549 | 513 |
Weighted average common shares outstanding | 10,770 | 9,895 | 10,859 | 9,905 |
Loss from continuing operations per common share | $ (0.45) | $ (0.04) | $ (0.50) | $ (0.06) |
Loss from discontinued operations per common share | 0.00 | 0.00 | 0.00 | (0.01) |
Net loss per common share | $ (0.45) | $ (0.04) | $ (0.50) | $ (0.07) |
Earnings per Share (EPS) (Narrative) (Details) |
3 Months Ended |
---|---|
Dec. 27, 2015
$ / shares
shares
| |
Earnings per Share (EPS) Narrative Details | |
Options to purchase shares of common stock excluded from computation of diluted eps | shares | 24,286 |
Exercise price of the options | $ / shares | $ 13.11 |
Options to purchase shares of common stock excluded from computation of diluted eps | shares | 15,000 |
Exercise price of the options | $ / shares | $ 8.16 |
Options to purchase shares of common stock excluded from computation of diluted eps | shares | 48,500 |
Exercise price of the options | $ / shares | $ 8.05 |
Income Taxes (Details) |
6 Months Ended |
---|---|
Dec. 27, 2015
USD ($)
| |
Income Taxes Details | |
Valuation allowance recorded against net deferred tax assets, (in millions) | $ 3.50 |
Related Party Transactions (Details) |
Dec. 27, 2015
USD ($)
|
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Related Party Transactions Details | |
NCMS was paid an initial fee | $ 150,000 |
Earns quarterly fees | 50,000 |
Additional fee per quarter | 50,000 |
Aggregate amount not to be exceeded in additional fees | $ 100,000 |
1 Year Rave Restaurant Chart |
1 Month Rave Restaurant Chart |
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