chuy-20210627

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-Q

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☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 27, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-35603

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CHUY’S HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

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Delaware						20-5717694
(State of Incorporation or Organization)						(I.R.S. Employer Identification No.)

1623 Toomey Rd.

Austin, Texas 78704

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (512) 473-2783

__________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CHUY	Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☑

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares of the registrant’s common stock outstanding at July 30, 2021 was 19,997,123.

Table of Contents



Part I – Financial Information			3
Item 1. Financial Statements			3
Condensed Consolidated Balance Sheets			3
Unaudited Condensed Consolidated Income Statements			4
Unaudited Condensed Consolidated Statements of Stockholders' Equity			5
Unaudited Condensed Consolidated Statements of Cash Flows			6
Notes to Unaudited Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			14
Item 3. Quantitative and Qualitative Disclosures about Market Risk			16
Item 4. Controls and Procedures			17
Part II – Other Information			17
Item 1. Legal Proceedings			17
Item 1A. Risk Factors			17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			17
Item 3. Defaults Upon Senior Securities			17
Item 4. Mine Safety Disclosures			17
Item 5. Other Information			17
Item 6. Exhibits			17

Table of Contents

Part I—Financial Information

Item 1. Financial Statements

Chuy's Holdings, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)


	June 27, 2021		December 27, 2020
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	113,547	$	86,817
Accounts receivable	1,246		1,507
Lease incentives receivable	—		200
Inventories	1,431		1,449
Income tax receivable	—		974
Prepaid expenses and other current assets	4,933		3,614
Total current assets	121,157		94,561
Property and equipment, net	181,354		185,105
Operating lease assets	158,162		159,156
Deferred tax asset, net	7,933		7,806
Other assets and intangible assets, net	1,330		1,078

Tradename	21,900		21,900
Goodwill	24,069		24,069
Total assets	$	515,905	$	493,675
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	4,310	$	2,977
Accrued liabilities	29,657		25,775
Operating lease liabilities	13,717		14,566





Total current liabilities	47,684		43,318

Operating lease liabilities, less current portion	203,663		207,601
Other liabilities	1,219		898



Total liabilities	252,566		251,817

Contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 19,997,123 shares issued and outstanding at June 27, 2021 and 19,710,549 shares issued and outstanding at December 27, 2020	200		197
Preferred stock, $0.01 par value; 15,000,000 shares authorized and no shares issued or outstanding at June 27, 2021 and December 27, 2020	—		—
Paid-in capital	148,191		144,897
Retained earnings	114,948		96,764
Total stockholders’ equity	263,339		241,858
Total liabilities and stockholders’ equity	$	515,905	$	493,675

See notes to the Unaudited Condensed Consolidated Financial Statements

Table of Contents

Chuy's Holdings, Inc.

Unaudited Condensed Consolidated Income Statements

(In thousands, except share and per share data)


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	June 27, 2021		June 28, 2020		June 27, 2021		June 28, 2020
Revenue	$	108,153	$	65,712	$	195,863	$	160,212
Costs and expenses:
Cost of sales	25,565		15,410		46,012		39,972
Labor	30,306		17,337		55,135		50,917
Operating	15,944		10,720		29,415		25,305
Occupancy	7,459		7,097		14,698		15,083
General and administrative	6,679		4,774		13,527		10,494
Marketing	1,238		365		2,215		1,374
Restaurant pre-opening	615		278		1,292		1,138

Impairment, closed restaurant and other costs	1,404		1,782		3,748		20,555
Gain on insurance settlements	—		(1,000)		—		(1,000)
Depreciation	5,086		4,895		10,004		10,184
Total costs and expenses	94,296		61,658		176,046		174,022
Income (loss) from operations	13,857		4,054		19,817		(13,810)
Interest expense, net	21		153		44		205
Income (loss) before income taxes	13,836		3,901		19,773		(14,015)
Income tax expense (benefit)	2,306		(601)		1,589		(6,113)
Net income (loss)	$	11,530	$	4,502	$	18,184	$	(7,902)
Net income (loss) per common share:
Basic	$	0.58	$	0.26	$	0.92	$	(0.46)
Diluted	$	0.57	$	0.26	$	0.90	$	(0.46)
Weighted-average shares outstanding:
Basic	19,980,513		17,555,506		19,866,721		17,095,422
Diluted	20,197,574		17,578,129		20,165,155		17,095,422

See notes to the Unaudited Condensed Consolidated Financial Statements

Table of Contents

Chuy's Holdings, Inc.

Unaudited Condensed Consolidated Statements of Stockholders' Equity

(In thousands, except share and per share data)


	Thirteen Weeks Ended
	Common Stock					Retained
	Shares	Amount		Paid-in Capital		Earnings		Total
Balance, March 28, 2021	19,946,228	$	199	$	145,731	$	103,418	$	249,348
Stock-based compensation	—	—		1,053		—		1,053
Proceeds from exercise of stock options	50,000	1		1,425		—		1,426
Settlement of restricted stock units	1,304	—		—		—		—

Indirect repurchase of shares for minimum tax withholdings	(409)	—		(18)		—		(18)
Net income	—	—		—		11,530		11,530
Balance, June 27, 2021	19,997,123	$	200	$	148,191	$	114,948	$	263,339

Balance, March 29, 2020	16,640,190	$	166	$	93,576	$	87,654	$	181,396
Stock-based compensation	—	—		1,045		—		1,045
Proceeds from exercise of stock options	3,171	—		34		—		34
Sale of common stock from ATM offering, net of fees and expenses	3,041,256	31		48,136		—		48,167
Settlement of restricted stock units	7,401	—		—		—		—

Indirect repurchase of shares for minimum tax withholdings	(2,126)	—		(29)		—		(29)
Net income	—	—		—		4,502		4,502
Balance, June 28, 2020	19,689,892	$	197	$	142,762	$	92,156	$	235,115

	Twenty-Six Weeks Ended
	Common Stock					Retained
	Shares	Amount		Paid-in Capital		Earnings		Total
Balance, December 27, 2020	19,710,549	$	197	$	144,897	$	96,764	$	241,858

Stock-based compensation	—	—		2,044		—		2,044
Proceeds from exercise of stock options	163,354	2		3,759		—		3,761
Settlement of restricted stock units	179,818	2		(2)		—		—

Indirect repurchase of shares for minimum tax withholdings	(56,598)	(1)		(2,507)		—		(2,508)
Net income	—	—		—		18,184		18,184
Balance, June 27, 2021	19,997,123	$	200	$	148,191	$	114,948	$	263,339

Balance, December 29, 2019	16,636,464	$	166	$	94,712	$	100,058	$	194,936

Stock-based compensation	—	—		1,957		—		1,957
Proceeds from exercise of stock options	3,171	—		34		—		34
Sale of common stock from ATM offering, net of fees and expenses	3,041,256	31		48,136		—		48,167
Settlement of restricted stock units	141,931	1		(1)		—		—
Repurchase of shares of common stock	(90,144)	(1)		(1,421)		—		(1,422)
Indirect repurchase of shares for minimum tax withholdings	(42,786)	—		(655)		—		(655)
Net loss	—	—		—		(7,902)		(7,902)
Balance, June 28, 2020	19,689,892	$	197	$	142,762	$	92,156	$	235,115

See notes to the Unaudited Condensed Consolidated Financial Statements

Table of Contents

Chuy's Holdings, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)


	Twenty-Six Weeks Ended
	June 27, 2021		June 28, 2020
Cash flows from operating activities:
Net income (loss)	$	18,184	$	(7,902)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	10,004		10,184
Amortization of operating lease assets	4,851		4,494
Amortization of loan origination costs	34		18
Impairment, closed restaurant and other costs	(1,575)		18,277
Stock-based compensation	1,947		1,823

Loss on disposal of property and equipment	—		409

Deferred income taxes	(127)		(5,854)
Changes in operating assets and liabilities:
Accounts receivable	261		203
Lease incentive receivable	200		(150)
Income tax receivable and payable	974		(1,055)
Inventories	18		119
Prepaid expenses and other assets	(1,585)		(2,067)
Accounts payable	1,199		1,217
Accrued and other liabilities	4,619		(123)

Operating lease liabilities	(6,922)		(202)


Net cash provided by operating activities	32,082		19,391
Cash flows from investing activities:
Purchase of property and equipment	(6,582)		(7,986)
Purchase of other assets	—		(366)
Net cash used in investing activities	(6,582)		(8,352)
Cash flows from financing activities:




Net proceeds from sale of common stock	—		48,167

Borrowings under revolving line of credit	—		25,000
Payments under revolving line of credit	—		(25,000)

Loan origination costs	(24)		—
Repurchase of shares of common stock	—		(1,422)
Proceeds from the exercise of stock options	3,761		34
Indirect repurchase of shares for minimum tax withholdings	(2,507)		(655)
Net cash provided by financing activities	1,230		46,124
Net increase in cash and cash equivalents	26,730		57,163
Cash and cash equivalents, beginning of period	86,817		10,074
Cash and cash equivalents, end of period	$	113,547	$	67,237

Supplemental disclosure of non-cash investing and financing activities:
Property and equipment and other assets acquired by accounts payable	$	134	$	152

Supplemental cash flow disclosures:
Cash paid for interest	$	16	$	147
Cash paid for income taxes	$	704	$	824

See notes to the Unaudited Condensed Consolidated Financial Statements

Chuy's Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Tabular dollar amounts in thousands, except share and per share data)

1. Basis of Presentation

Chuy’s Holdings, Inc. (the “Company” or “Chuy’s”) develops and operates Chuy’s restaurants throughout the United States. Chuy’s is a growing, full-service restaurant concept offering a distinct menu of authentic, freshly-prepared Mexican and Tex-Mex inspired food. As of June 27, 2021, the Company operated 95 restaurants across 17 states.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements and the related notes reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented. The unaudited condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”), except that certain information and notes have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission (the “SEC”). Results for interim periods are not necessarily indicative of the results that may be expected for the full fiscal year. The unaudited condensed consolidated financial statements should be read in conjunction with consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2020. The accompanying condensed consolidated balance sheet as of December 27, 2020, has been derived from our audited consolidated financial statements.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period. Actual results could differ from those estimates.

Certain prior year amounts have been reclassified in our unaudited condensed consolidated financial statements and notes thereto to conform to current year presentation.

The Company operates on a 52- or 53- week fiscal year that ends on the last Sunday of the calendar year. Each quarterly period has 13 weeks, except for a 53-week year when the fourth quarter has 14 weeks. Our 2021 and 2020 fiscal years both consist of 52 weeks.

2. Recent Accounting Pronouncements

The Company reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on the Company's consolidated financial statements.

3. Net Income (Loss) Per Share

The number of shares and net income (loss) per share data for all periods presented are based on the historical weighted-average shares of common stock outstanding.

Basic net income (loss) per share of the Company's common stock is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding for the period.

Diluted net income (loss) per share of common stock is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential shares of common stock equivalents outstanding during the period using the treasury stock method for dilutive options and restricted stock units (the options and restricted stock units were granted under the Chuy's Holdings, Inc. 2012 Omnibus Equity Incentive Plan (the "2012 Plan") and the Chuy's Holdings, Inc. 2020 Omnibus Incentive Plan (the "2020 Plan")). For the thirteen weeks ended June 27, 2021 and June 28, 2020, there were approximately none and 241,700 shares, respectively, of common stock equivalents that were excluded from the calculation of diluted net income (loss) per share because their inclusion would have been anti-dilutive. For the twenty-six weeks ended June 27, 2021 and June 28, 2020, there were approximately 3,396 and

SEC Form 10-Q filed by Chuy&#39;s Holdings, Inc.

SEC Form 10-Q filed by Chuy's Holdings, Inc.