Chuy’s(CHUY) - 2023 Q1 - Quarterly Report

Part I – Financial Information Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2023, detailing financial position and performance Unaudited Condensed Consolidated Balance Sheets As of March 26, 2023, total assets increased to $479.4 million, driven by cash, while liabilities decreased and stockholders' equity grew Consolidated Balance Sheet Highlights (in thousands) | Account | March 26, 2023 (Unaudited) | December 25, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $82,598 | $78,028 | | Total current assets | $91,215 | $87,818 | | Total assets | $479,433 | $474,781 | | Total current liabilities | $43,487 | $44,358 | | Total liabilities | $226,855 | $230,220 | | Total stockholders' equity | $252,578 | $244,561 | Unaudited Condensed Consolidated Income Statements Q1 2023 revenue grew 12.0% to $112.5 million, with net income up 49.0% to $8.2 million and diluted EPS at $0.45 Q1 2023 vs Q1 2022 Income Statement (in thousands, except per share data) | Metric | Thirteen Weeks Ended March 26, 2023 | Thirteen Weeks Ended March 27, 2022 | | :--- | :--- | :--- | | Revenue | $112,498 | $100,486 | | Income from operations | $8,370 | $6,083 | | Net income | $8,222 | $5,518 | | Basic EPS | $0.46 | $0.29 | | Diluted EPS | $0.45 | $0.29 | Unaudited Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity increased to $252.6 million as of March 26, 2023, primarily due to net income, partially offset by share repurchases - Net income of $8.2 million increased retained earnings[17] - Stock-based compensation added $1.0 million to paid-in capital[17] - Indirect share repurchases for tax withholdings amounted to $1.5 million[17] Unaudited Condensed Consolidated Statements of Cash Flows Net cash from operations significantly increased to $12.1 million in Q1 2023, leading to a $4.6 million overall cash increase Summary of Cash Flows (in thousands) | Activity | Thirteen Weeks Ended March 26, 2023 | Thirteen Weeks Ended March 27, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,129 | $6,851 | | Net cash used in investing activities | ($6,318) | ($2,613) | | Net cash used in financing activities | ($1,241) | ($21,146) | | Net increase (decrease) in cash | $4,570 | ($16,908) | | Cash and cash equivalents, end of period | $82,598 | $89,713 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail 99 restaurant operations, a $50.0 million share repurchase program, and an IRS dispute over tenant allowances - As of March 26, 2023, the Company operated 99 restaurants across 17 states[21] - A $50.0 million share repurchase program was authorized through December 31, 2024, with the full amount remaining available as of March 26, 2023[35] - The company is in a dispute with the IRS regarding tenant allowances, with a potential tax liability ranging from $0.5 million to $2.5 million if the IRS position is upheld[48] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q1 2023 performance, highlighting 12.0% revenue growth from strong comparable sales and a robust financial position Overview Chuy's is a growing full-service Mexican and Tex-Mex restaurant concept, operating 99 restaurants across 17 states - As of March 26, 2023, Chuy's operated 99 restaurants in 17 states[60] - The company's motto, 'If you've seen one Chuy's, you've seen one Chuy's!', reflects its unique, eclectic, and family-friendly atmosphere[60] Performance Indicators Key performance indicators for Q1 2023 show comparable restaurant sales increased by 8.0%, driven by higher average weekly customers and average check Key Performance Indicators | Indicator | Thirteen Weeks Ended March 26, 2023 | Thirteen Weeks Ended March 27, 2022 | | :--- | :--- | :--- | | Total open restaurants (end of period) | 99 | 96 | | Change in comparable restaurant sales | 8.0% | 11.4% | | Average unit volumes (in thousands) | $1,133 | $1,054 | | Average check | $18.81 | $17.71 | - The 8.0% increase in comparable restaurant sales was driven by a 1.8% increase in average weekly customers and a 6.2% increase in average check[65] Results of Operations Q1 2023 revenue increased 12.0% to $112.5 million, with net income growing to $8.2 million, while cost of sales decreased and labor costs rose Income Statement Summary (in thousands) | Line Item | Q1 2023 | Q1 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $112,498 | $100,486 | $12,012 | 12.0% | | Income from operations | $8,370 | $6,083 | $2,287 | 37.6% | | Net income | $8,222 | $5,518 | $2,704 | 49.0% | - Revenue growth was driven by an 8.0% increase in comparable restaurant sales and incremental revenue from new restaurants[65] - Labor costs as a percentage of revenue rose to 30.3% from 29.7% due to approximately 7% hourly labor rate inflation, despite menu price increases[65] Liquidity and Capital Resources The company maintains strong liquidity with $82.6 million cash, no debt, full credit facility availability, and a new $50.0 million share repurchase program - As of March 26, 2023, the Company had $82.6 million in cash and cash equivalents, no debt, and $35.0 million of availability under its revolving credit facility[78] - A new share repurchase program for up to $50.0 million was approved in October 2022, with the full amount available as of March 26, 2023[78] Quantitative and Qualitative Disclosures about Market Risk No material changes to quantitative and qualitative disclosures about market risk were reported from the prior Annual Report on Form 10-K - There have been no material changes to market risk disclosures from the previously filed Annual Report[70] Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 26, 2023, with no material changes to internal control over financial reporting - Disclosure controls and procedures were effective as of March 26, 2023, as concluded by the principal executive and financial officers[83] - No material changes occurred in internal control over financial reporting during the quarter ended March 26, 2023[73] Part II – Other Information Legal Proceedings The company reported no material legal proceedings during the period - The company reports no material legal proceedings[91] Risk Factors No material changes were reported to the risk factors previously disclosed in the company's Annual Report filed with the SEC - There have been no material changes from the risk factors previously disclosed in the Annual Report filed with the SEC[84] Unregistered Sales of Equity Securities and Use of Proceeds This section of the report did not contain any information Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[91] Mine Safety Disclosures This item is not applicable to the company - None[91] Other Information The company reported no other information required to be disclosed in this section - None[91] Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The report includes required certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1) and Inline XBRL data files (Exhibits 101 and 104)[91]