Quarterly report pursuant to Section 13 or 15(d)

Note 7 - Segment Information

v3.22.2.2
Note 7 - Segment Information
 9 Months Ended
Sep. 25, 2022
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

(7) Segment Information

 

The Company has two reportable segments – the Company-owned steakhouse segment and the franchise operations segment. The Company does not rely on any major customers as a source of revenue. The Company-owned Ruth’s Chris Steak House restaurants, all of which are located in North America, operate within the full-service dining industry, providing similar products to similar customers. Revenues are derived principally from food and beverage sales. As of September 25, 2022, (i) the Company-owned steakhouse restaurant segment included 77 Ruth’s Chris Steak House restaurants and three Ruth’s Chris Steak House restaurants operating under contractual agreements and (ii) the franchise operations segment included 74 franchisee-owned Ruth’s Chris Steak House restaurants. Segment profits for the Company-owned steakhouse restaurant segments equal segment revenues less segment expenses. Segment revenues for the Company-owned steakhouse restaurants include restaurant sales, management agreement income and other restaurant income. Gift card breakage revenue is not allocated to operating segments. Not all operating expenses are allocated to operating segments. Segment expenses for the Company-owned steakhouse segment include food and beverage costs and restaurant operating expenses.  No other operating costs are allocated to the Company-owned steakhouse segment for the purpose of determining segment profits because such costs are not directly related to the operation of individual restaurants. The accounting policies applicable to each segment are consistent with the policies used to prepare the consolidated financial statements. The profit of the franchise operations segment equals franchise income, which consists of franchise royalty fees and franchise opening fees. No costs are allocated to the franchise operations segment.

 

Segment information related to the Company’s two reportable business segments follows (in thousands):

 

   

13 Weeks Ended

    

39 Weeks Ended

  
   

September 25,

    

September 26,

    

September 25,

    

September 26,

  
   

2022

    

2021

    

2022

    

2021

  
                                 

Revenues:

                                

Company-owned steakhouse restaurants

   $ 107,042     $ 98,713     $ 349,451     $ 286,880  

Franchise operations

     4,906       4,742       14,766       13,062  

Unallocated other revenue and revenue discounts

     791       732       3,301       2,439  

Total revenues

   $ 112,739     $ 104,187     $ 367,518     $ 302,381  
                                 

Segment profits:

                                

Company-owned steakhouse restaurants

   $ 20,453     $ 19,282     $ 79,408     $ 69,938  

Franchise operations

     4,906       4,742       14,766       13,062  

Total segment profit

     25,359       24,024       94,174       83,000  
                                 

Unallocated operating income

     791       732       3,301       2,439  

Marketing and advertising expenses

     (3,419 )     (2,436 )     (13,082 )     (7,661 )

General and administrative costs

     (9,372 )     (7,721 )     (27,939 )     (23,691 )

Depreciation and amortization expenses

     (5,535 )     (4,985 )     (15,462 )     (15,131 )

Pre-opening costs

     (1,093 )     (581 )     (2,718 )     (1,185 )

Loss on settlement

     —       —       (6,000 )     —  

Loss on impairment

     —       —       —       (394 )

Interest expense, net

     (434 )     (678 )     (998 )     (3,109 )

Other income

     53       (18 )     116       61  

Income before income tax expense

   $ 6,350     $ 8,337     $ 31,392     $ 34,329  
                                 

Capital expenditures:

                                

Company-owned steakhouse restaurants

   $ 10,138     $ 3,759     $ 26,679     $ 6,172  

Corporate assets

     1,534       2,155       8,086       2,246  

Total capital expenditures

   $ 11,672     $ 5,914     $ 34,765     $ 8,418  

 

   

September 25,

    

December 26,

  
   

2022

    

2021

  

Total assets:

                

Company-owned steakhouse restaurants

   $ 433,998     $ 404,929  

Franchise operations

     1,486       2,801  

Corporate assets - unallocated

     68,878       128,249  

Total assets

   $ 504,362     $ 535,979