Ruth’s Hospitality Group, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Leases (Tables)

Leases (Tables)

9 Months Ended

Sep. 29, 2019

Summarizes Impacts of Adopting Topic 842 on Company's Condensed Consolidated Balance Sheet

The Company did not experience material changes to either the consolidated statements of income or the consolidated statements of cash flows due to the adoption of Topic 842. The following table summarizes the impacts of adopting Topic 842 on the Company’s condensed consolidated balance sheet as of December 31, 2018 (in thousands):

	December 30,		Adjustments Due
	2018		to the Adoption			December 31,
	As Reported		of ASC 842			2018
Assets
Current assets:
Cash and cash equivalents	$	5,062	$	—		$	5,062
Accounts receivable, less allowance for doubtful accounts		19,476		812			20,288
Inventory		9,296		—			9,296
Prepaid expenses and other		2,528		—			2,528
Total current assets		36,362		812			37,174
Property and equipment, net of accumulated depreciation		125,991		—			125,991
Operating lease right of use assets		—		166,040			166,040
Goodwill		36,522		—			36,522
Franchise rights, net of accumulated amortization		44,919		—			44,919
Other intangibles, net of accumulated amortization		4,862		(758	)		4,104
Deferred income taxes		5,353		413			5,766
Other assets		604		—			604
Total assets	$	254,613	$	166,507		$	421,120
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	10,273	$	—		$	10,273
Accrued payroll		19,475		—			19,475
Accrued expenses		10,535		—			10,535
Deferred revenue		48,370		—			48,370
Current operating lease liabilities		—		16,707			16,707
Other current liabilities		6,619		(1,698	)		4,921
Total current liabilities		95,272		15,009			110,281
Long-term debt		41,000		—			41,000
Operating lease liabilities		—		178,256			178,256
Deferred rent		23,692		(23,692	)		—
Unearned franchise fees		2,680		—			2,680
Other liabilities		1,837		(1,805	)		32
Total liabilities		164,481		167,768			332,249
Commitments and contingencies (Note 12)		—		—			—

Shareholders' equity:
Common stock, par value $.01 per share; 100,000,000 shares authorized, 29,268,776 shares issued and outstanding at December 30, 2018		293		—			293
Additional paid-in capital		61,819		—			61,819
Retained earnings		28,020		(1,261	)		26,759
Treasury stock, at cost; 71,950 shares at December 30, 2018		—		—			—
Total shareholders' equity		90,132		(1,261	)		88,871
Total liabilities and shareholders' equity	$	254,613	$	166,507		$	421,120

Schedule of Components of Lease Expense

The components of lease expense are as follows (in thousands):

		13 Weeks Ended		39 Weeks Ended
	Classification	September 29, 2019		September 29, 2019
Operating lease cost	Restaurant operating expenses and General and administrative costs	$	6,962	$	20,055
Variable lease cost	Restaurant operating expenses and General and administrative costs		2,417		7,770
Total lease cost		$	9,379	$	27,825

Schedule of Maturities of Lease Liabilities

As of September 29, 2019, maturities of lease liabilities are summarized as follows (in thousands):

	Operating Leases
2019, excluding first thirty-nine weeks ended September 29, 2019	$	6,958
2020		28,039
2021		26,892
2022		25,654
2023		22,660
Thereafter		208,059
Total future minimum rental commitments	$	318,262

Schedule of Future Minimum Annual Rental Commitments for Operating Leases Prior to Adoption of ASC 842

As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2018, and under the previous lease accounting prior to the adoption of ASC 842, future minimum annual rental commitments for operating leases as of December 30, 2018 were as follows (in thousands):

	Operating Leases
2019	$	25,767
2020		24,177
2021		22,520
2022		21,388
2023		18,858
Thereafter		154,661
Total future minimum rental commitments	$	267,371

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows (in thousands):

	39 Weeks Ended
	September 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	19,688
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	41,522