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What changed in BJs RESTAURANTS INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BJs RESTAURANTS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+215 added−245 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-28)

Top changes in BJs RESTAURANTS INC's 2024 10-K

215 paragraphs added · 245 removed · 188 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

81 edited+15 added−21 removed112 unchanged
Biggest changeOur craft beer is produced at five in-house brewing facilities and by independent third-party brewers using our proprietary recipes. Our Internet address is https://www.bjsrestaurants.com . Electronic copies of our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are available, free of charge, by visiting the “Investors” section of our website.
Biggest changeElectronic copies of our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are available, free of charge, by visiting the “Investors” section of our website. These reports are posted as soon as practical after they are electronically filed with the SEC.
Our Gold Standard of Operational Excellence is focused on the following key areas that help to differentiate BJ’s from other casual dining restaurants: • High-Energy Atmosphere and Facilities – We believe that one of our greatest competitive differentiators is the design, ambiance and energy of our restaurants, which feature a signature bar statement, making them a destination for our guests to spend quality time with friends and family.
Our Gold Standard of Operational Excellence is focused on the following key areas that help differentiate BJ’s from other casual dining restaurants: • High-Energy Atmosphere and Facilities – We believe that one of our greatest competitive differentiators is the design, ambiance and energy of our restaurants, which feature a signature bar statement, making them a destination for our guests to spend quality time with friends and family.
The 4 TASC Force program recognizes and supports the volunteer efforts of our restaurant team members across the country, as they donate their own free time to benefit charitable causes and community events which are important to them, while helping give back to the communities in which our restaurants do business.
The TASC Force program recognizes and supports the volunteer efforts of our restaurant team members across the country, as they donate their own free time to benefit charitable causes and community events which are 4 important to them, while helping give back to the communities in which our restaurants do business.
Holidays (and shifts in the holiday calendar) and severe weather including hurricanes, tornadoes, thunderstorms, snow and ice storms, prolonged extreme temperatures and similar conditions may impact restaurant sales volumes in some of the markets where we operate. Many of our restaurants are located in or near shopping centers and malls that typically experience seasonal 9 fluctuations in sales.
Holidays (and shifts in the holiday calendar) and severe weather including hurricanes, tornadoes, thunderstorms, snow and ice storms, prolonged extreme temperatures and similar conditions may impact restaurant sales volumes in some of the markets where we operate. Many of our restaurants are located in or near shopping centers and malls that typically experience seasonal fluctuations in sales.
Nevertheless, we remain vigilant and may reinstate any of the additional safety or health and wellness precautions that were instituted during the pandemic if public health conditions worsen in any of our service areas or future government regulations require us to do so. We also continuously encourage our team members to speak up about safety matters.
We remain vigilant and may reinstate any of the additional safety or health and wellness precautions that were instituted during the pandemic if public health conditions worsen in any of our service areas or future government regulations require us to do so. We also continuously encourage our team members to speak up about safety matters.
We prefer to open our restaurants in mature trade areas with dense populations. We generally target geographic regions that allow us to build multiple restaurants in those areas. This “clustering” approach provides economic benefits including lower supply and distribution costs, improved marketing efficiencies, management supervision leverage and increased brand awareness.
We prefer to open our restaurants in mature trade areas with dense populations. We 7 generally target geographic regions that allow us to build multiple restaurants in those areas. This “clustering” approach provides economic benefits including lower supply and distribution costs, improved marketing efficiencies, management supervision leverage and increased brand awareness.
We apply for our alcoholic beverage licenses with the advice of outside legal and licensing counsel and consultants. Even after the issuance of these licenses, our operations could be subject to differing interpretations of the “tied house” laws and the requirements of the “three tier system” of beverage alcohol distribution in any jurisdiction that we conduct business.
We apply for our alcoholic beverage licenses with the advice of outside legal and licensing counsel and consultants. Even after the 11 issuance of these licenses, our operations could be subject to differing interpretations of the “tied house” laws and the requirements of the “three tier system” of beverage alcohol distribution in any jurisdiction that we conduct business.
That said, one of the key insights of our guest research in 2021 found that over 10 million potential guests who share many of the characteristics of our most frequent guests and live within 10 miles of a BJ’s restaurant, yet who have never been to a BJ’s.
That said, one of the key insights of our guest research in 2021 found that over 10 million potential guests who share many of the characteristics of our most frequent guests and live within 10 miles of a BJ’s restaurant have never been to a BJ’s.
Even if we operate our restaurants in strict compliance with ICE and state requirements, some of our team members may not meet federal work eligibility requirements, despite our efforts and without 12 our knowledge, which could lead to a disruption in our work force.
Even if we operate our restaurants in strict compliance with ICE and state requirements, some of our team members may not meet federal work eligibility requirements, despite our efforts and without our knowledge, which could lead to a disruption in our work force.
We have invested carefully to recruit, select, train and retain employees, referred to as “team members,” who can take care of our guests with gracious hospitality and consistently and efficiently execute our recipes and steps of service.
We have invested carefully to recruit, select, train and retain employees, referred to as “team members,” who can take care of our guests with gracious hospitality and consistently 2 and efficiently execute our recipes and steps of service.
In addition to hiring quality team members, we continue to 2 invest in productivity and hospitality programs to enhance our ability to consistently deliver the Gold Standard of Operational Excellence we promise our guests.
In addition to hiring quality team members, we continue to invest in productivity and hospitality programs to enhance our ability to consistently deliver the Gold Standard of Operational Excellence we promise our guests.
In addition to overseeing the daily operations of our restaurants, our Senior Vice President of Operations also oversees facility management, restaurant openings and integrating our operating strategy and initiatives to our restaurants.
In addition to overseeing the daily operations of our restaurants, our Senior Vice President of Operations also oversees facility management, restaurant openings and integrating our operating strategy and initiatives into our restaurants.
The Executive Kitchen Manager oversees managing food quality and preparation, purchasing, inventories and kitchen labor costs as well as hiring, training and development of kitchen personnel. New restaurant managers are required to successfully complete a 10-week comprehensive advanced management training program dedicated to all operational aspects of our restaurants including both restauranteuring and restaurant business-related topics.
The Executive Kitchen Manager oversees managing food quality and preparation, purchasing, inventories and kitchen labor costs as well as hiring, training and development of kitchen personnel. New restaurant managers are required to successfully complete a 10-week comprehensive advanced management training program dedicated to all operational aspects of our restaurants including both restaurateuring and restaurant business-related topics.
We actively work to ensure positive team member relations and a respectful workplace, frequently reinforcing the high ethical and professional standards set forth in our Code of Integrity, Ethics and Conduct which we believe should drive every decision we make. Currently, no unions or collective bargaining arrangements are in place at our Company.
We actively work to ensure positive team member relations and a respectful workplace, frequently reinforcing the high ethical and professional standards set forth in our Code of Integrity, Ethics and Conduct which we believe should guide every decision we make. Currently, no unions or collective bargaining arrangements are in place at our Company.
It is common in the casual dining industry for many new locations to initially open with sales volumes well in excess of their sustainable run-rate levels. Given this initial “honeymoon” sales period, it may take up to five years until a new restaurant’s sales eventually settle at a more predictable and sustainable level.
It is common in the casual dining industry for many new locations to initially open with sales volumes well in excess of their sustainable run-rate levels. Given this initial “honeymoon” sales period, it may take up to three years until a new restaurant’s sales eventually settle at a more predictable and sustainable level.
Community At BJ’s, we believe it is important to give back to the communities we serve and to do more good things for more people. Our Foundation, which is a 501(c)(3) qualified non-profit charitable organization, established in 2006, is principally dedicated to supporting charities benefiting children’s healthcare and education.
Philanthropy At BJ’s, we believe it is important to give back to the communities we serve and to do more good things for more people. Our Foundation, which is a 501(c)(3) qualified non-profit charitable organization, established in 2006, is principally dedicated to supporting charities benefiting children’s healthcare and education.
Our restaurant concept is a relatively small “varied menu” casual dining competitor compared to the mature “mass market” chains. 60 of our restaurants are located in one state - California. Our overall brand awareness and competitive presence in states outside of California is not as significant as that of our major casual dining chain competitors.
Our restaurant concept is a relatively small “varied menu” casual dining competitor compared to the mature “mass market” chains. 59 of our restaurants are located in one state - California. Our overall brand awareness and competitive presence in states outside of California is not as significant as that of our major casual dining chain competitors.
BJ’s is a national restaurant chain that, as of February 27, 2023, owns and operates 216 restaurants located in 30 states. The first BJ’s restaurant opened in 1978 in Orange County, California, and was a small sit-down pizzeria that featured Chicago style deep-dish pizza with a unique California twist.
BJ’s is a national restaurant chain that, as of February 27, 2024, owns and operates 216 restaurants located in 30 states. The first BJ’s restaurant opened in 1978 in Orange County, California, and was a small sit-down pizzeria that featured Chicago style deep-dish pizza with a unique California twist.
Additionally, our brewing operations team analyzes each batch of BJ’s branded beer in internal laboratories and we periodically send samples to an independent laboratory for quality control testing purposes. Our brewing operations are typically staffed with a head brewer and assistant brewers, who report to a brewing director.
Our brewing operations are typically staffed with a head brewer and assistant brewers, who report to a brewing director. The brewing operations team analyzes each batch of BJ’s branded beer in internal laboratories, and we periodically send samples to an independent laboratory for quality control testing purposes.
We also employed approximately 225 team members at our Restaurant Support Center in Huntington Beach, California and our field supervision positions around the country, whose primary goal is to provide gold standard support to our restaurant teams so they can focus on serving our guests.
We also employed approximately 230 team members at our Restaurant Support Center in Huntington Beach, California and our field supervision positions around the country, whose primary goal is to provide gold standard support to our restaurant teams so they can focus on serving our guests.
We also utilize in-restaurant messaging and merchandising to promote our brand and drive our average check and also have a loyalty program, BJ’s Premier Rewards Plus®, where our guests receive one-to-one communication and engagement programs to drive frequency and ambassadorship. Our marketing related expenditures were approximately 1.7%, 1.4%, and 1.7% of revenues for fiscal 2022, 2021 and 2020, respectively.
We also utilize in-restaurant messaging and merchandising to promote our brand and drive our average check and also have a loyalty program, BJ’s Premier Rewards Plus®, where our guests receive one-to-one communication and engagement programs to drive frequency and ambassadorship. Our marketing related expenditures were approximately 1.8%, 1.7%, and 1.4% of revenues for fiscal 2023, 2022 and 2021, respectively.
As with the vast majority of businesses in the United States, we do not have insurance coverage related to business interruptions or other effects of any pandemic (and specifically COVID-19). We carry employment practices insurance, which covers claims involving matters such as harassment, discrimination, and wrongful termination; however, it excludes class and collective action wage and hour claims.
As with the vast majority of businesses in the United States, we do not have insurance coverage related to business interruptions or other effects of any pandemic. We carry employment practices insurance, which covers claims involving matters such as harassment, discrimination, and wrongful termination; however, it excludes class and collective action wage and hour claims.
Our average per-guest check during fiscal 2022, including beverages, increased from approximately $19.00 in 2021 to approximately $20.00 in 2022, and was impacted by changes in our sales mix, higher item incidence per guest and menu price increases to help mitigate higher costs from inflationary pressures. • A Culture Committed to Gracious Service and Hospitality – Completely satisfying dining experiences start with engaged, knowledgeable and hospitable people.
Our average per-guest check during fiscal 2023, including beverages, increased from approximately $20.00 in 2022 to approximately $21.00 in 2023, and was impacted by changes in our sales mix, higher item incidence per guest and menu price increases to help mitigate higher costs from inflationary pressures. • A Culture Committed to Gracious Service and Hospitality – Completely satisfying dining experiences start with engaged, knowledgeable and hospitable people.
Potential restaurant locations may not have a tenant improvement allowance available, and such allowances, when available, will vary in amount. In selecting sites for our restaurants, an important objective is to earn a suitable rate of return on our investment that is in excess of our cost of capital.
Potential restaurant locations may not have a tenant improvement allowance available, and such allowance, when available, will vary in amount. In selecting sites for our restaurants, an important objective is to earn a suitable rate of return on our investment that exceeds our cost of capital.
RESTAURANT SITE SELECTION AND EXPANSION OBJECTIVES Our current restaurant format is expected to represent the vast majority of our planned new restaurant growth for the foreseeable future; however, we are constantly evaluating ways to further enhance unit productivity and efficiency.
RESTAURANT SITE SELECTION AND EXPANSION OBJECTIVES Our current restaurant format is expected to represent the vast majority of our planned new restaurant growth for the foreseeable future; however, we are constantly evaluating ways to reduce construction costs and to further enhance unit productivity and efficiency.
Approximately 19% of our hourly restaurant team members provide their services on a full-time basis, as defined by the Affordable Care Act.
Approximately 18% of our hourly restaurant team members provide their services on a full-time basis, as defined by the Affordable Care Act.
Examples of programs we have implemented to date include: • Use of 100% recycled napkins and paper towels • Use of recycled products for the lids and bases of our take-out containers • Use of plastic bags made of 20% post-consumer resin • Portioning paper towels to reduce waste • Installation of flush-valve toilets and faucets, LED fixtures, high efficiency water heaters, low emittance window glass systems, and energy efficient cooking equipment in our newer restaurants • Offering electric vehicles in our fleet vehicle program • Use of energy-efficient HVAC equipment • Recycling of organics to prevent them from going into landfills at over 15% of our restaurants • Use of digital rather than paper new-hire onboarding and other employment-related documents across our company • Hybrid in-person/remote work schedule at our Restaurant Support Center to balance the importance of workplace culture and stewardship of the environment, including leveraging of video and telephone conferencing tools to reduce the need for travel to in-person meetings • Testing of food donation program that improves donation frequency • Leveraging our handheld computers to convert various paper logs at each restaurant into a digital format to reduce paper use, printing and freight Our Human and Labor Rights Policy, Environmental Stewardship Policy, Food and Personal Safety and Quality Policy, and Vendor Partner Compliance Program information confirm our focus on taking care of our people, communities, stakeholders and planet.
Examples of programs we have implemented to date include: • Use of 100% recycled napkins and paper towels • Use of recycled products for the lids and bases of our take-out containers • Use of plastic bags made of 20% post-consumer resin • Portioning paper towels to reduce waste • Installation of flush-valve toilets and faucets, LED fixtures, high efficiency water heaters, low emittance window glass systems, and energy efficient cooking equipment in our newer restaurants • Offering electric vehicles in our fleet vehicle program • Use of energy-efficient HVAC equipment • Recycling of organics to prevent them from going into landfills at several of our restaurants • Use of digital rather than paper new-hire onboarding and other employment-related documents across the Company • Hybrid in-person/remote work schedule at our Restaurant Support Center to balance the importance of workplace culture and stewardship of the environment, including leveraging of video and telephone conferencing tools to reduce the need for travel • Restaurant-based food donation program in select restaurants • Leveraging our handheld computers to convert various paper logs at each restaurant into a digital format to reduce paper use, printing and freight costs Our Human Rights and Labor Rights Policy, Environmental Stewardship Policy, Food and Personal Safety and Quality Policy, Animal Welfare Policy, and Vendor Partner Compliance Program information confirm our focus on taking care of our people, communities, stakeholders and planet.
Houdek served as Director of Strategic Planning and Marketing Analysis at Taco Bell from June 2017 to January 2019, and as Sr. Manager of Strategic Planning from June 2015 to June 2017. Mr. Houdek also served as Manager of Mergers and Acquisitions at Yum! Brands from February 2014 to June 2015.
Prior to that, Mr. Houdek served as 6 Director of Strategic Planning and Marketing Analysis at Taco Bell from June 2017 to January 2019, and as Sr. Manager of Strategic Planning from June 2015 to June 2017. Mr. Houdek also served as Manager of Mergers and Acquisitions at Yum! Brands from February 2014 to June 2015.
We expect our marketing expenditures in 2023 to be 1.5% to 2.0% of our revenues. SEASONALITY AND ADVERSE WEATHER Our business is impacted by weather and other seasonal factors that typically impact other restaurant operations.
We expect our marketing expenditures in fiscal 2024 to be 1.5% to 2.0% of our revenues. SEASONALITY AND ADVERSE WEATHER Our business is impacted by weather and other seasonal factors that typically impact other restaurant operations.
More information on our environmental stewardship efforts is available on our website at: https://investors.bjsrestaurants.com/governance/governance-documents/default.aspx 5 Information About Our Executive Officers The following table sets forth certain information concerning our executive officers and other members of the executive leadership team as of February 27, 2023: Name Age Position Gregory S. Levin 55 Chief Executive Officer, President and Director Brian S.
More information on our environmental stewardship efforts is available on our website at: https://investors.bjsrestaurants.com/governance/governance-documents/default.aspx Information About Our Executive Officers The following table sets forth certain information concerning our executive officers and other members of the executive leadership team as of February 27, 2024: Name Age Position Gregory S. Levin 56 Chief Executive Officer, President and Director Brian S.
Through our order tracker, contactless curbside pickup with short message service (“SMS”) text and email technology, we keep our guests informed of their menu order and allow them to notify the restaurant when they arrive.
Through our digital order tracker, contactless curbside pickup with short message service (“SMS”) text, email technology, and automated wait list we keep our guests informed of their menu order and allow them to notify the restaurant when they arrive.
In addition, our revenues can be affected by illness or health concerns stemming from incidents occurring at our suppliers or competing suppliers or that appear to be transmitted via public interactions such as the COVID-19 pandemic. We attempt to manage risks of this nature by leveraging food quality and safety controls throughout our supply chain and internal training programs.
In addition, our revenues can be affected by illness or health concerns stemming from incidents occurring at our suppliers or competing suppliers or that appear to be transmitted via public interactions. We attempt to manage risks of this nature by leveraging food quality and safety controls throughout our supply chain and internal training programs.
We believe that by delivering upon this commitment to our guests, we create the best opportunity to generate significant repeat business and capture additional market share. While our core strategy has remained consistent, we are always striving to evolve and enhance our guests’ experience.
We believe that by delivering upon this commitment to our guests, while continuing our national restaurant expansion program, we create the best opportunity to generate significant repeat business and capture additional market share. While our core strategy has remained consistent, we are always striving to evolve and enhance our guests’ experience.
Our food quality and safety teams strive to ensure compliance with our food safety programs and practices, components of which include: • Partnering with suppliers to improve food safety processes and technology • Food safety training for all new team members • Advanced food safety training for management trainees • Manager food safety certifications • Several layers of audits and inspections: o Unannounced audits by an independent third-party auditing company to validate food safety and personal safety protocols o BJ’s internal Quality Assurance team audits o Operation’s team food safety audits o Regulatory inspections • Daily food safety checks based on Hazard Analysis and Critical Control Points (“HACCP”) principles • Tamper-resistant bag seals for all take-out orders 11 • Daily team member wellness checks and stay at home requirements for symptomatic team members during the COVID-19 pandemic • Utilization of technology to manage food safety risks GOVERNMENT REGULATIONS We are subject to various federal, state and local laws, rules and regulations that affect our business.
Our food quality and safety teams strive to ensure compliance with our food safety programs and practices, components of which include: • Partnering with suppliers to improve food safety processes and technology • Food safety training for all new team members • Advanced food safety training for management trainees • Manager food safety certifications • Several layers of audits and inspections: o Unannounced audits by an independent third-party auditing company to validate food safety and personal safety protocols o BJ’s internal Quality Assurance team audits o Operation’s team food safety audits o Regulatory inspections • Daily food safety checks based on Hazard Analysis and Critical Control Points (“HACCP”) principles • Tamper-resistant bag seals for all take-out orders • Utilization of technology to manage food safety risks GOVERNMENT REGULATIONS We are subject to various federal, state and local laws, rules and regulations that affect our business.
We also offer slow roast large format proteins including prime rib, double bone-in pork chops and tri-tip sirloin, as well as guest favorites that include a brewhouse twist and our better for you EnLIGHTened Entrees® options. • Award Winning, Proprietary Craft Beer – All of our restaurants feature BJ’s award-winning craft beer, which showcases the quality and care of the ingredients used at BJ’s.
We also offer slow roast large format proteins including prime rib, double bone-in pork chops and tri-tip sirloin, as well as our better-for-you EnLIGHTened Entrees® options. • Award Winning, Proprietary Craft Beer – All of our restaurants feature BJ’s award-winning craft beer, which showcases the quality and care of the ingredients used at BJ’s.
Our menu entrées, excluding our promotional specials, generally range in price from $8.25 to $32.95. We also offer Daily Brewhouse Specials Monday through Thursday, which feature some of our most iconic food and drink items at a lower price, as well as daily lunch specials and happy hour offerings, where permitted, to reinforce our everyday value proposition.
Our menu entrées, excluding our promotional specials, generally range in price from $8.75 to $34.95. We also offer Daily Brewhouse Specials, which feature some of our most iconic food and drink items at a lower price, as well as daily lunch specials and happy hour offerings, where permitted, to reinforce our everyday value proposition.
Today our restaurants feature a broad menu with over 100 menu items designed to offer something for everyone including: slow roasted entrees such as prime rib, EnLIGHTened Entrees® such as our Cherry Chipotle Glazed Salmon, our original signature deep-dish pizza, the world-famous Pizookie® dessert, and our award-winning BJ’s craft beers.
Today our restaurants feature a broad menu with approximately 100 menu items designed to offer something for everyone including: slow roasted entrees such as prime rib, EnLIGHTened Entrees® such as our Cherry Chipotle Glazed Salmon, our original signature deep-dish pizza, and the world-famous Pizookie® dessert.
We cannot predict whether steps taken by us to protect our proprietary rights will be adequate to prevent misappropriation of these rights or the use by others of restaurant features based upon, or otherwise similar to, our concept and products.
There can be no assurances that, and we cannot predict whether, the steps taken by us to protect our proprietary rights will be adequate to prevent misappropriation of these rights or the use by others of restaurant features based upon, or otherwise similar to, our concept, trademarks, and products.
Houdek 42 Senior Vice President and Chief Financial Officer Christopher P. Pinsak 58 Senior Vice President, Operations Alexander M. Puchner 61 Senior Vice President, Brewing Operations GREGORY S. LEVIN has served as our Chief Executive Officer, President and as a member of our Board of Directors since September 2021.
Houdek 43 Senior Vice President and Chief Financial Officer Christopher P. Pinsak 59 Senior Vice President, Operations Alexander M. Puchner 62 Senior Vice President, Brewing Operations GREGORY S. LEVIN has served as our Chief Executive Officer, President and as a member of our Board of Directors since September 2021.
During fiscal 2022, we internally brewed approximately 53% of our branded craft beers, with approximately 60% of this amount brewed in our Temple, Texas brewpub locations. We also produce proprietary non-alcoholic craft sodas that are sold in our restaurants. Our craft soda flavors include root beer, ginger beer, cream, orange and black cherry soda.
During fiscal 2023, we internally brewed approximately 64% of our branded craft beers, with approximately 58% of this amount brewed in our Temple, Texas brewpub locations. We also produce proprietary non-alcoholic craft sodas that are sold in our restaurants. Our handcrafted soda flavors include root beer, ginger beer, vanilla cream, orange cream and black cherry.
We were also one of the first in casual dining to utilize the quick response (“QR”) code and WiFi geolocation technologies for both menu browsing and mobile payment to provide a touchless experience for guests who dine at our restaurants. • Bringing the Brewhouse Home to Our Guests – Consumer preferences continue to evolve as e-commerce, mobile shopping and “food-on-demand” continue to gain traction and direct visitation away from traditional brick and mortar shopping locations, a trend which accelerated during the COVID-19 pandemic.
We were also one of the first in casual dining to utilize the quick response (“QR”) code and Wi-Fi geolocation technologies for both menu browsing and mobile payment to provide a touchless experience for guests who dine at our restaurants. • Bringing the Brewhouse Home to Our Guests – Consumer preferences continue to evolve as e-commerce, mobile shopping and “food-on-demand” continue to gain traction and direct visits away from traditional brick-and-mortar shopping locations.
As of January 3, 2023, of our team members who indicated a racial or ethnic identity, or whose racial or ethnic identity can otherwise be determined, approximately 47% are female and approximately 59% are from under-represented racial or ethnic communities.
As of January 2, 2024, of our team members who indicated a racial or ethnic identity, or whose racial or ethnic identity can otherwise be determined, approximately 47% are female and approximately 60% are from under-represented racial or ethnic communities.
Our Chairman of the Board of Directors, our retired Executive Vice President of Operations, and two of our current executive officers serve on the Foundation’s six-person Board of Directors.
Our Chairman of the Board of Directors, our retired Executive Vice President of Operations, and three of our current executive officers serve on the Foundation’s nine-person Board of Directors.
We have also registered with the United States Patent and Trademark Office many of our standard and seasonal beer logos and names, as well as many of our signature menu item names including “Pizookie” for our proprietary dessert and “Enlightened Entrees” and “Craft Matters” for our branding. We have registered our BJ’s logo mark in a number of foreign countries.
We have also registered with the United States Patent and Trademark Office many of our standard and seasonal beer logos and names, as well as many of our signature menu item names including “Pizookie” for our proprietary dessert and “Enlightened Entrees” and “Craft Matters” for our branding.
Each of our restaurants typically employs an approximate average of 100 hourly team members, many of whom work part-time.
Each of our restaurants typically employs approximately 100 hourly team members, many of whom work part-time.
In partnership with others in our operations, supply chain, people and finance departments, the committee is responsible for executing a multi-year ESG strategic plan. The committee provides updates to the Governance and Nominating Committee of our Board of Directors on a quarterly basis.
Our sustainability leadership team spearheads our Environmental, Social, and Governance (“ESG”) initiatives. In partnership with others in our operations, supply chain, people, real estate and finance departments, the committee is responsible for executing a multi-year ESG strategic plan. The committee provides updates to the Governance and Nominating Committee of our Board of Directors on a quarterly basis.
Our domestically-registered trademarks and service marks include, among others, our stylized logos displaying the name “BJ’s” for restaurant services, restaurant and bar services, on-line ordering and take-out restaurant services and the word mark “BJ’s” for restaurant and bar services, take-out and carry-out restaurant services.
Our trademarks and service marks domestically registered with the United States Patent and Trademark Office include, among others, our stylized logos displaying the name “BJ’s” for beer, restaurant services, restaurant and bar services, on-line ordering and take-out restaurant services and the word mark 12 “BJ’s” for beer, restaurant and bar services, take-out and carry-out restaurant services.
HOUDEK has served as our Senior Vice President and Chief Financial Officer since September 2021. He previously served as our Vice President of Strategy and Financial Planning and Analysis from July 2019 until August 2021. From January 2019 to June 2019, Mr. Houdek served as Director of Strategy at KFC. Prior to that, Mr.
Consulting and an investment banker at Merrill Lynch. THOMAS A. HOUDEK has served as our Senior Vice President and Chief Financial Officer since September 2021. He previously served as our Vice President of Strategy and Financial Planning and Analysis from July 2019 until August 2021. From January 2019 to June 2019, Mr. Houdek served as Director of Strategy at KFC.
Krakower 52 Executive Vice President and Chief Information Officer Amy B. Krallman 56 Executive Vice President and Chief People Officer Gregory S. Lynds 61 Executive Vice President and Chief Development Officer Kendra D. Miller 48 Executive Vice President, General Counsel and Corporate Secretary Putnam K. Shin 44 Executive Vice President and Chief Growth and Innovation Officer Thomas A.
Krakower 53 Executive Vice President and Chief Information Officer Amy B. Krallman 57 Executive Vice President and Chief People Officer 5 Gregory S. Lynds 62 Executive Vice President and Chief Development Officer Kendra D. Miller 49 Executive Vice President, General Counsel and Corporate Secretary Putnam K. Shin 45 Executive Vice President and Chief Growth and Innovation Officer Thomas A.
Prior to that, Mr. Shin served as Manager of Corporate Strategy and Business Development at the Walt Disney Company in Burbank, California from May 2008 to August 2010. Earlier in his career, he served as a management consultant at L.E.K. Consulting and an investment banker at Merrill Lynch. THOMAS A.
Consulting in the London, UK office, a global strategy consulting firm, with his last position as Partner. Prior to that, Mr. Shin served as Manager of Corporate Strategy and Business Development at the Walt Disney Company in Burbank, California from May 2008 to August 2010. Earlier in his career, he served as a management consultant at L.E.K.
HUMAN CAPITAL As of January 3, 2023, we employed approximately 22,000 team members at our 216 restaurants.
HUMAN CAPITAL As of January 2, 2024, we employed approximately 21,000 team members at our 216 restaurants.
Merlin Entertainments is a global developer and operator of over 140 theme parks, hotels, resorts and indoor attractions across 24 countries with brands including LEGOLAND Resorts, SEA 6 LIFE aquarium and Madame Tussauds. From September 2010 to August 2014, Mr. Shin served as Partner at L.E.K. Consulting in the London, UK office, a global strategy consulting firm.
Merlin Entertainments is a global developer and operator of over 140 theme parks, hotels, resorts and indoor attractions across 24 countries with brands including LEGOLAND Resorts, SEA LIFE aquarium and Madame Tussauds. From September 2010 to August 2014, Mr. Shin was employed by L.E.K.
We offer 12 year-round signature BJ’s beers and one or more rotating seasonal BJ’s beers on tap at any one time. We also offer approximately 20 domestic, imported and “guest” craft beers on tap, in addition to a selection of bottled beers. Additionally, our restaurants offer our craft beer for take-out in cans or growlers, where legally permitted.
We offer 12 year-round signature BJ’s beers and one or more rotating seasonal BJ’s beers on tap at any one time. We also offer a signature hard cider and approximately 20 domestic, imported and “guest” craft beers on tap, in addition to a selection of bottled beers.
Our restaurant management training program is led by our Vice President of Operations Talent Development and is closely monitored by our field supervision team. Additionally, in order to maintain our high standards, all new hourly restaurant team members participate in a formal training program and work with Team Member Instructors at each restaurant who help them master their new roles.
Additionally, in order to maintain our high standards, all new hourly restaurant team members participate in a formal training program and work with Team Member Instructors at each restaurant who help them master their new roles.
Additionally, we use a variety of higher quality guest touchpoints, including distinctive glassware to fit the beer or beverage style and linen napkins not generally found in “mass-market” casual dining. • Broad and Distinctive Menu – BJ’s concept includes menu options that meet our guests’ preferences for any dining occasion.
Additionally, we use a variety of higher quality guest touchpoints, including distinctive glassware to fit the beer or beverage style and linen napkins not generally found in “mass-market” casual dining.
TARGETED NEW RESTAURANT ECONOMICS Our current restaurant prototypes average approximately 7,500 square feet with seating for as many as 250 guests with a targeted all-in gross construction cost of approximately $6.0 million to $7.0 million, some of which may be reimbursed to us by our landlords in the form of tenant improvement allowance incentives.
TARGETED NEW RESTAURANT ECONOMICS Our fiscal 2023 restaurant prototype averaged approximately 7,500 square feet with seating for as many as 250 guests with a targeted all-in net construction cost of approximately $7.0 million, including what was reimbursed to us by our landlords in the form of tenant improvement allowance incentives.
We generally target our new restaurants to achieve average annual sales at maturity of $6.0 million to $7.0 million, and we target an average “four wall” estimated operating cash flow margin in the range of 15% to 20% at maturity after all occupancy expenses, which includes the assumption of continued progress recovering profit margins in the years following the COVID-19 pandemic and related macroeconomic disruptions.
We generally target our new restaurants to achieve average annual sales at maturity of $6.5 million to $7.0 million and an average “four wall” estimated operating cash flow margin in the range of 15% to 20% after all occupancy expenses.
Our expansive and unique beer offerings are intended to enhance BJ’s competitive positioning as a leading craft beer retailer in casual dining. We are also testing our BJ’s Brewhouse Beer Club in most of our California restaurants.
Additionally, our restaurants offer our craft beer and cider for take-out in cans or growlers, where legally permitted. Our expansive and unique beer offerings are intended to enhance BJ’s competitive positioning as a leading craft beer retailer in casual dining. We also offer our BJ’s Brewhouse Beer Club throughout most of California.
Our restaurants are typically open every day of the year except for Thanksgiving and Christmas. All of our restaurants currently offer take-out and delivery services. Additionally, all of our restaurants offer a call-ahead or online wait list, on-line ordering for dine-in, guest pick-up or curbside delivery and reservations for large parties.
Additionally, all of our restaurants offer a call-ahead or online wait list, on-line ordering for dine-in, guest pick-up or curbside delivery and reservations for large parties.
For many of our menu ingredients, we have arranged for acceptable alternative manufacturers, vendors, growers and shippers in order to reduce risk in our supply chain. In addition to 10 procuring food ingredients, beverages, products and supplies for our restaurants, the supply chain department also manages the procurement agreements in the areas of energy, transportation and general corporate services.
In addition to procuring food ingredients, beverages, products and supplies for our restaurants, the supply chain department also manages the procurement agreements in the areas of energy, transportation and general corporate services.
The preopening expense for one of our restaurants usually includes costs to compensate an average of six to eight restaurant management team members prior to opening; costs to recruit and train an average of 150 hourly restaurant team members; wages, travel and lodging costs for our opening training team and other support team members; costs to practice service activities; and straight-line minimum base rent during the construction and in-restaurant training period.
The preopening expense for one of our restaurants usually includes costs to compensate an average of six to eight restaurant management team members prior to opening; costs to recruit and train an average of 150 hourly restaurant team members; wages, travel and lodging costs for our opening training team and other support team members; costs to practice service activities; and straight-line minimum base rent during the construction and in-restaurant training period. 8 Our preopening expense averaged approximately $0.6 million per new restaurant in fiscal 2023, which remains approximately $0.2 million higher than pre-pandemic averages due to increased costs from inflationary pressures, including costs of labor and commodities.
In order to maximize operating efficiencies between purchase and usage, a restaurant manager determines daily usage requirements for food ingredients, products and supplies for their restaurant and places orders with vendors approved by our supply chain department. A manager also inspects our deliveries to ensure that the items received meet our quality specifications and negotiated prices.
Our goal is to obtain the highest quality menu ingredients, products and supplies from reliable sources at competitive prices. In order to maximize operating efficiencies between purchase and usage, a restaurant manager determines daily usage requirements for food ingredients, products and supplies for their restaurant and places orders with vendors approved by our supply chain department.
Our menu items are created by our talented culinary team and prepared to order in our restaurants using high-quality ingredients.
Our concept includes menu options that meet our guests’ preferences for any dining occasion and our menu items are created by our talented culinary team and prepared to order in our restaurants using high-quality ingredients.
Additionally, all of our new restaurants usually require a year or longer after opening to reach their targeted restaurant-level operating margin due to cost of sales and labor inefficiencies commonly associated with opening more complex casual dining restaurants. 8 RESTAURANT OPENING EXPENSES Restaurant opening expenses (also referred to as “preopening” expenses) include incremental out-of-pocket costs that are directly related to the openings of new restaurants and may not be capitalized.
Additionally, all of our new restaurants usually require a year or longer after opening to reach their targeted restaurant-level operating margin due to cost of sales and labor inefficiencies commonly associated with opening more complex casual dining restaurants.
In addition, we may face claims of misappropriation or infringement of third parties’ trademarks, patents or other intellectual property rights. Defending these claims may be costly and, if unsuccessful, may prevent us from continuing to use certain intellectual property rights or information in the future and may result in a judgment or monetary damages.
Defending these claims, whether or not they have merit, may be time-consuming and costly and, if unsuccessful, may prevent us from continuing to use certain intellectual property rights or information in the future and may result in a judgment or monetary damages.
In addition, we arrange for the collection and donation of other funds to CFF through our restaurant preopening training events. We also focus on supporting our local communities by providing volunteer hours, food and other resources for many worthwhile charitable causes and events through a program called Team Action to Support Communities (“TASC Force”).
We partnered with The National Multiple Sclerosis Society and donated 25 cents for every pint brewed. In addition to national campaigns, we also focus on supporting our local communities by providing volunteer hours, food and other resources for many worthwhile charitable causes and events through a program called Team Action to Support Communities (“TASC Force”).
INFORMATION SYSTEMS AND CYBERSECURITY We continue to focus on providing our operators with best in class, intuitive, secure technology that is tailored to our business so they can provide unsurpassed hospitality to our guests and our team members in a productive and efficient manner.
As a result of these and other factors, our financial results for any given quarter may not be indicative of the results that may be achieved for a full fiscal year. 9 INFORMATION SYSTEMS We continue to focus on providing our operators with best-in-class, intuitive, secure technology that is tailored to our business so they can provide unsurpassed hospitality to our guests and our team members in a productive and efficient manner.
We believe, however, that our ability to offer higher quality food and beverages at moderate prices with superior service in a distinctive dining environment provides us with the opportunity to capture additional market share in the casual dining segment.
We believe, however, that our ability to offer higher quality food and beverages at moderate prices with superior service in a distinctive dining environment provides us with the opportunity to capture additional market share in the casual dining segment. 10 FOOD QUALITY AND SAFETY Our revenues can be substantially affected by adverse publicity resulting from food quality, illness, or health and safety concerns if incidents occur at our restaurants, as well as if incidents occur at our competitors’ restaurants.
Our Gold Standard of Operational Excellence is our genuine commitment to take pride in passionately connecting with every guest on every visit, through flawless and relentless execution of every detail, during every shift – to create and keep fanatical fans of BJ’s.
Our primary business objective is to increase our market share in the casual dining restaurant industry by consistently delivering on our “Gold Standard of Operational Excellence” promise to our guests, which is our genuine commitment to take pride in passionately connecting with every guest on every visit, through flawless and relentless execution of every detail, during every shift, to create and keep fanatical fans of BJ’s.
During fiscal 2022, we opened six new restaurants and closed two restaurants. As a result, we increased our overall total restaurant operating weeks by approximately 3.1% during the year, including the effect of the 53rd week. We expect to open as many as five new restaurants in fiscal 2023.
During fiscal 2023, we opened five new restaurants and closed five restaurants. As a result, and coupled with one less operating week in fiscal 2023 as compared to fiscal 2022, we decreased our overall total restaurant operating weeks by approximately 0.5% during the year. We expect to open three new restaurants in fiscal 2024.
Caring about those in the communities we serve is only one aspect of this compassion. Caring for the BJ’s family of team members and loved ones is another. Our Give A Slice program was created to help our fellow co-workers and their families in their times of need and is fully funded by voluntary team member contributions.
Our Give A Slice program was created to help our fellow co-workers and their families in their times of need and is fully funded by voluntary team member contributions.
Our menu features a wide variety of choices, ensuring there’s something for everyone and yet we are able to modify nearly every menu item to satisfy any guest's request to ensure it is “made their way.” Both are important factors in our differentiation from other casual dining competitors.
Our menu features a wide variety of choices, ensuring there’s something for everyone and yet we are able to modify nearly every menu item to satisfy any guest's request to ensure it is “made their way.” We evaluate our menu offerings and prices two to three times a year in addition to offering seasonal or limited time only menu items throughout the year.
Team Member Safety Throughout fiscal 2022, we have continued to comply with state and local government regulations and health recommendations, as applicable, to promote guest and team member wellness and to maintain clean restaurants. As the pandemic recedes in the United States, many of the COVID-19 protocols have been relaxed or removed as of the date of this report.
Team Member Safety Throughout fiscal 2023, we have continued to comply with state and local government regulations and health recommendations, as applicable, to promote guest and team member wellness and to maintain clean restaurants.
There may be other restaurants, retailers and/or businesses that also use our marks in some form or fashion throughout the United States and abroad. It may be difficult for us to prevent others from copying elements of our concept. Any litigation undertaken to enforce our rights will likely be costly.
There may be other restaurants, retailers and/or businesses that also use our marks in some form or fashion throughout the United States and abroad.
Information systems projects are prioritized based upon strategic, financial, regulatory, risk and other business advantage criteria. SUPPLY CHAIN MANAGEMENT Our supply chain department, working together with our culinary, marketing and operations teams, is responsible for the selection and procurement of all of the food ingredients, beverages, products and supplies for our restaurants and brewing operations.
SUPPLY CHAIN MANAGEMENT Our supply chain department, working together with our culinary, marketing and operations teams, is responsible for the selection and procurement of all of the food ingredients, beverages, products and supplies for our restaurants and brewing operations. Specifications are mandated by the supply chain department in order to consistently maintain the highest quality ingredients and operational materials.
Quarterly results have been and will continue to be significantly impacted by the timing of new restaurant openings and their associated restaurant opening expenses. As a result of these and other factors, our financial results for any given quarter may not be indicative of the results that may be achieved for a full fiscal year.
Quarterly results have been and will continue to be significantly impacted by the timing of new restaurant openings and their associated restaurant opening expenses.
From funeral expenses for lost team members or their loved ones, to help in times of financial distress after a fire, natural disaster, theft or illness, Give A Slice helps hundreds of team members each year. Annually our restaurants participate in a variety of philanthropic partnerships, two of which are with the Alzheimer’s Association® and No Kid Hungry®.
From funeral expenses for lost team members or their loved ones, to help in times of financial distress after a fire, natural disaster, theft or illness, Give A Slice helps hundreds of team members each year. ENVIRONMENTAL SUSTAINABILITY AND STEWARDSHIP We recognize that building a sustainable business is consistent with our goal of generating long-term shareholder value.
Our hand-pressed deep-dish pizza dough is double proofed – which means it rises twice – elevating its presentation and taste.
Building on our early pizza legacy, we offer almost 20 signature flavors of pizza and made-to-order combinations in tavern-cut and deep-dish styles. Our hand-pressed deep-dish pizza dough is double proofed – which means it rises twice – elevating its presentation and taste.
Additional domestic and foreign trademark applications are pending. We have also registered our ownership of the internet domain name “ www.bjsrestaurants.com ” and other internet domain names. We have in the past protected, and expect to continue to vigorously protect, our proprietary rights.
We own numerous copyrights for items such as product packaging, promotional materials, in-restaurant graphics and training materials. We have also registered our ownership of the internet domain name “www.bjsrestaurants.com” and other internet domain names. We have in the past protected, and expect to continue to vigorously protect, our proprietary rights.
Preopening costs can fluctuate significantly from period to period, based on the number and timing of restaurant openings and the specific preopening costs incurred for each restaurant. We expense preopening costs as incurred in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).
We usually incur the most significant portion of preopening costs within the two-month period immediately preceding a restaurant’s opening. Preopening costs can fluctuate significantly from period to period, based on the number and timing of restaurant openings and the specific preopening costs incurred for each restaurant.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, we cannot provide assurance that menu price increases will not deter guests from visiting our restaurants, reduce the frequency of their visits or affect their purchasing decisions. 14 Negative publicity about us, our restaurants, other restaurants, or others across the food supply chain, due to food borne illness or for other reasons, whether or not accurate, may adversely affect the reputation and popularity of our restaurants and our results of operations.
Biggest changeNegative publicity about us, our restaurants, other restaurants, or others across the food supply chain, due to food borne illness or for other reasons, whether or not accurate, may adversely affect the reputation and popularity of our restaurants and our results of operations. The good reputation of our restaurants is a key factor to the success of our business.
Any inability or failure to successfully expand our restaurant operations or open and adequately staff new restaurants may adversely affect our growth rate and results of operations. A critical factor in our future success is our ability to expand our restaurant operations successfully, which will depend in large part on our ability to open new restaurants in a profitable manner.
Any inability or failure to successfully expand our restaurant operations or open and adequately staff new restaurants may adversely affect our growth rate and results of operations. A critical factor in our future success is our ability to expand our restaurant operations, which will depend in large part on our ability to open new restaurants in a profitable manner.
Our business is subject to large number of federal, state, and laws and regulations, including those relating to: • the production, distribution and sale of alcoholic beverages; • employment practices and working conditions, including, among others, minimum wage and other wage and benefit requirements, overtime pay, meal and rest breaks, predictive scheduling, paid leave requirements, work eligibility requirements, team member classification as exempt/non-exempt for overtime and other purposes, immigration status, workplace safety, discrimination, and harassment; 21 • public accommodations and safety conditions, including the Americans with Disabilities Act and similar state laws that give protections to individuals with disabilities in the context of employment, public accommodations, and other areas; • environmental matters, such as emissions and air quality, water consumption, and the discharge, storage, handling, release, and disposal of hazardous or toxic substances; • preparation, sale and labeling of food, including regulations of the Food and Drug Administration, including those relating to inspections and food recalls, menu labeling and nutritional content; • data privacy laws and standards for the protection of personal information, including social security numbers, financial information (including credit card numbers), and health information, and payment card industry standards and requirements; • building and zoning requirements, including state and local licensing and regulation governing the design and operation of facilities and land use, • health, sanitation, safety and fire standards; and • public company compliance, disclosure and governance matters, including accounting regulations, SEC and NASDAQ disclosure requirements.
Our business is subject to large number of federal, state, and laws and regulations, including those relating to: • the production, distribution and sale of alcoholic beverages; • employment practices and working conditions, including, among others, minimum wage and other wage and benefit requirements, overtime pay, meal and rest breaks, predictive scheduling, paid leave requirements, work eligibility requirements, team member classification as exempt/non-exempt for overtime and other purposes, immigration status, workplace safety, discrimination, and harassment; • public accommodations and safety conditions, including the Americans with Disabilities Act and similar state laws that give protections to individuals with disabilities in the context of employment, public accommodations, and other areas; • environmental matters, such as emissions and air quality, water consumption, and the discharge, storage, handling, release, and disposal of hazardous or toxic substances; • preparation, sale and labeling of food, including regulations of the Food and Drug Administration, including those relating to inspections and food recalls, menu labeling and nutritional content; • data privacy laws and standards for the protection of personal information, including social security numbers, financial information (including credit card numbers), and health information, and payment card industry standards and requirements; • building and zoning requirements, including state and local licensing and regulation governing the design and operation of facilities and land use, • health, sanitation, safety and fire standards; and • public company compliance, disclosure and governance matters, including accounting regulations, SEC and NASDAQ disclosure requirements.
If our distributors, suppliers and independent third-party brewers cease doing business with us, or cannot make a scheduled delivery to us, or are unable to obtain credit in a tightened credit market or experience other issues, we may experience short-term product supply shortages in some or all of our restaurants and may be required to purchase food, beer and beverage products from alternate suppliers at higher prices.
If our distributors, suppliers and independent third-party brewers cease doing business with us, or cannot make a scheduled delivery to us, or are unable to obtain credit in a tightened credit market or experience other issues, we may experience 17 short-term product supply shortages in some or all of our restaurants and may be required to purchase food, beer and beverage products from alternate suppliers at higher prices.
However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately 19 support field operations and other breakdowns in normal communication and operating procedures that may have a material adverse effect on our financial condition, results of operation and exposure to administrative and other legal claims.
However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal communication and operating procedures that may have a material adverse effect on our financial condition, results of operation and exposure to administrative and other legal claims.
Those fluctuations may be based on various factors, including the following: • actual or anticipated fluctuations in comparable restaurant sales or operating results, whether in our operations or in those of our competitors; • changes in financial estimates or opinions by research analysts, either with respect to us or other casual dining companies; • any failure to meet investor or analyst expectations, particularly with respect to total restaurant operating weeks, number of restaurant openings, comparable restaurant sales, average weekly sales per restaurant, total revenues, operating margins and net income per share; • the public’s reaction to our press releases, other public announcements and our filings with the SEC; • actual or anticipated changes in domestic or worldwide economic, political or market conditions, such as recessions or international currency fluctuations; • changes in the consumer spending environment; • terrorist acts; • union organization; • changes in laws or regulations, or new interpretations or applications of laws and regulations, that are applicable to our business; • changes in accounting standards, policies, guidance, interpretations or principles; • short sales, hedging and other derivative transactions in the shares of our common stock; • future sales or issuances of our common stock, including sales or issuances by us, our directors or executive officers and our significant shareholders; • our dividend policy; • changes in the market valuations of other restaurant companies; • actions by shareholders, including actions of activist investors or unsolicited takeover proposals; • various market factors or perceived market factors, including rumors, involving us, our suppliers and distributors, whether accurate or not; • announcements by us or our competitors of new locations, menu items, technological advances, significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives; • the addition or loss of a key member of management; and • changes in the costs or availability of key inputs to our operations.
Those fluctuations may be based on various factors, including the following: • actual or anticipated fluctuations in comparable restaurant sales or operating results, whether in our operations or in those of our competitors; • changes in financial estimates or opinions by research analysts, either with respect to us or other casual dining companies; • any failure to meet investor or analyst expectations, particularly with respect to total restaurant operating weeks, number of restaurant openings, comparable restaurant sales, average weekly sales per restaurant, total revenues, operating margins and net income per share; • the public’s reaction to our press releases, other public announcements and our filings with the SEC; • actual or anticipated changes in domestic or worldwide economic, political or market conditions, such as recessions or international currency fluctuations; • changes in the consumer spending environment; • terrorist acts; • union organization; • changes in laws or regulations, or new interpretations or applications of laws and regulations, which are applicable to our business; • changes in accounting standards, policies, guidance, interpretations or principles; • short sales, hedging and other derivative transactions in the shares of our common stock; • future sales or issuances of our common stock, including sales or issuances by us, our directors or executive officers and our significant shareholders; • our dividend policy; • changes in the market valuations of other restaurant companies; • actions by shareholders, including actions of activist investors or unsolicited takeover proposals; 21 • various market factors or perceived market factors, including rumors, involving us, our suppliers and distributors, whether accurate or not; • announcements by us or our competitors of new locations, menu items, technological advances, significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives; • the addition or loss of a key member of management; and • changes in the costs or availability of key inputs to our operations.
We anticipate that our new restaurants will generally take several months or even longer to reach targeted productivity levels due to the inefficiencies typically associated with new restaurants, including lack of initial market and consumer awareness, the need to hire and train sufficient management and 16 restaurant team members and other factors.
We anticipate that our new restaurants will generally take several months or even longer to reach targeted productivity levels due to the inefficiencies typically associated with new restaurants, including lack of initial market and consumer awareness, the need to hire and train sufficient management and restaurant team members and other factors.
Our senior executives have been instrumental in setting our strategic direction, operating our business, identifying, recruiting and training key personnel, identifying expansion opportunities and arranging necessary financing. Losing the services of any of these individuals may materially adversely affect our business until a suitable replacement is found.
Our senior executives have been instrumental in setting our strategic direction, operating our business, identifying, 16 recruiting and training key personnel, identifying expansion opportunities and arranging necessary financing. Losing the services of any of these individuals may materially adversely affect our business until a suitable replacement is found.
Any such changes in interpretation may adversely impact our current model of brewing beer or supplying beer, or both, to our restaurants in that state, and may also cause us to lose, either temporarily or permanently, the licenses, permits and registrations necessary to conduct our restaurant operations, and subject us to fines and penalties.
Any such changes in interpretation may adversely impact our current model of brewing beer or 19 supplying beer, or both, to our restaurants in that state, and may also cause us to lose, either temporarily or permanently, the licenses, permits and registrations necessary to conduct our restaurant operations, and subject us to fines and penalties.
Failure to comply with federal, state or local regulations may cause our licenses to be revoked and force us to cease the brewing or sale of alcoholic beverages, or both, or the serving of 20 food at our restaurants. Additionally, state liquor laws may prevent or impede the expansion of our restaurants into certain markets.
Failure to comply with federal, state or local regulations may cause our licenses to be revoked and force us to cease the brewing or sale of alcoholic beverages, or both, or the serving of food at our restaurants. Additionally, state liquor laws may prevent or impede the expansion of our restaurants into certain markets.
Any decrease in guest traffic or the average expenditure per guest will negatively impact our financial results, since reduced sales result in the deleveraging of the fixed and semi-fixed costs in our operations and thereby cause downward pressure on our operating profits and margins.
Any decrease in guest traffic or the average expenditure per guest will negatively impact our financial results, since reduced sales result in the deleveraging of the fixed and semi-fixed costs in our operations and thereby cause downward pressure on our 14 operating profits and margins.
Compliance with these laws and regulations can increase our exposure to litigation or governmental investigations or proceedings. We may become party to legal proceedings which could have a material adverse effect on our business.
Compliance with these laws and regulations can increase our exposure to litigation or governmental investigations or proceedings. 20 We may become party to legal proceedings which could have a material adverse effect on our business.
We are subject to a variety of laws, government regulation, and other legal requirements and any failure to comply with these laws and regulations or any new laws or regulations could have a material adverse effect on our operations.
We are subject to a variety of laws, government regulations and other legal requirements and any failure to comply with these laws and regulations or any new laws or regulations could have a material adverse effect on our operations.
Some of our co-tenants have ceased or may cease operations 15 in the future or have deferred openings or fail to open in a retail development after committing to do so.
Some of our co-tenants have ceased or may cease operations in the future or have deferred openings or fail to open in a retail development after committing to do so.
Increasing the federal and/or state excise tax on alcoholic beverages, or certain types of alcoholic beverages, is frequently proposed in various jurisdictions either to increase revenues or discourage purchase by underage drinkers. If adopted, these measures may affect some or all of our proprietary craft beer products.
Increasing the federal and/or state excise tax on alcoholic beverages, or certain types of alcoholic beverages, is frequently proposed in various jurisdictions either to increase revenues or discourage purchases by underage drinkers. If adopted, these measures may affect some or all of our proprietary craft beer products.
We compete on the basis of the taste, quality and price of food offered, customer service, brand name identification, beer quality and selection, facilities attractiveness, restaurant location, atmosphere and overall dining experience. In addition, we compete with other restaurants and retailers for real estate.
We compete on the basis of the taste, quality and price of food offered, guest service, brand name identification, beer quality and selection, facilities attractiveness, restaurant location, atmosphere and overall dining experience. In addition, we compete with other restaurants and retailers for real estate.
Any such adverse developments with respect to our landlords may adversely impact our operations. Our restaurants are generally located in or around high traffic retail developments with nationally recognized co-tenants, which help increase overall guest traffic into those retail developments.
Any such adverse developments with respect to our landlords may adversely impact our operations. Our restaurants are generally located in or around high traffic retail developments with nationally recognized co-tenants, which helps increase overall guest traffic into those retail developments.
Compliance with the CPRA and other current and future privacy, cybersecurity and related laws may be involve significant costs.
Compliance with the CPRA and other current and future privacy, cybersecurity and related laws may involve significant costs.
Our ability to efficiently manage our business depends significantly on the reliability and capacity of our in-house information systems and those technology services and systems that we contract for from third parties.
Our ability to efficiently 18 manage our business depends significantly on the reliability and capacity of our in-house information systems and those technology services and systems that we contract from third parties.
Any inability or failure of distributors or suppliers to provide food and beverages to us in a timely fashion may adversely affect our reputation, guest patronage, revenues and results of operations.
Any inability or failure of distributors, suppliers or independent third-party brewers to provide food, beverages and beer to us in a timely fashion may adversely affect our reputation, guest patronage, revenues and results of operations.
Furthermore, various factors beyond our control, including the lingering effects of the 17 COVID-19 pandemic, adverse weather conditions and governmental regulations, as well as increased public concern over food safety standards and local and state governmental requirements, could materially harm our business and may also cause our food and supply costs to increase.
Furthermore, various factors beyond our control, including adverse weather conditions and governmental regulations, as well as increased public concern over food safety standards and local and state governmental requirements, could materially harm our business and may also cause our food and supply costs to increase.
Any inability to maintain our brand image and compete effectively in the restaurant industry may adversely affect our revenues, profitability and financial results. The restaurant industry is highly competitive.
Risks Related to our Restaurant Business, Operations and Future Growth The restaurant industry is highly competitive. Any inability to maintain our brand image and compete effectively in the restaurant industry may adversely affect our revenues, profitability and financial results. The restaurant industry is highly competitive.
In addition to the risk factors presented below, changes in general economic conditions, credit markets, consumer tastes, discretionary spending patterns, demographic trends, 13 and consumer confidence in the economy, all of which affect consumer behavior and spending for restaurant dining occasions, may have a material impact on us.
However, they may ultimately adversely affect our business, financial condition and/or operating results. In addition to the risk factors presented below, changes in general economic conditions, credit markets, consumer tastes, discretionary spending patterns, demographic trends, and consumer confidence in the economy, all of which affect consumer behavior and spending for restaurant dining occasions, may have a material impact on us.
If our costs increase, our operating margins and results of operations will be adversely affected if we are unable to increase our menu prices to offset such increased costs or if our increased menu prices result in less guest traffic.
However, there is no guarantee that our menu price increases will be accepted by our guests. If our costs increase, our operating margins and results of operations will be adversely affected if we are unable to increase our menu prices to offset such increased costs or if our increased menu prices result in less guest traffic.
In the past, including as a result of the COVID-19 pandemic, we have experienced dramatic price increases of certain items necessary to operate our restaurants and brewing operations, including increases in the cost of food, commodities, labor, team member benefits, insurance arrangements, construction, energy and other costs.
In the past, we have experienced dramatic price increases of certain items necessary to operate our restaurants and brewing operations, including increases in the cost of food, commodities, labor, team member benefits, insurance arrangements, construction, energy and other costs. We utilize menu price increases to help offset the increased cost of commodities, minimum wage and other costs.
In addition, if other restaurants are able to promote and deliver a higher degree of perceived value through heavy discounting or other methods, our guest traffic levels may suffer which would adversely impact our revenues and profitability.
In addition, if other restaurants are able to promote and deliver a higher degree of perceived value through heavy discounting or other methods, our guest traffic levels may suffer, which would adversely impact our revenues and profitability. 13 Our inability or failure to successfully and sufficiently raise menu prices to offset rising costs and expenses may adversely affect guest traffic and our results of operations.
The market price of our common stock may fluctuate significantly, as it has during the COVID-19 pandemic, and our shareholders may not be able to resell their shares at or above the price they paid for them.
The market price of our common stock may be volatile, and our shareholders may lose all or part of their investment. The market price of our common stock may fluctuate significantly, and our shareholders may not be able to resell their shares at or above the price they paid for them.
Any adverse weather conditions, seasonal fluctuations, natural disasters and environmental matters, including the effects of climate change, may adversely affect our results of operations.
Accordingly, there can be no guarantees that our proprietary brewing requirements will continue to be met in the future. Any adverse weather conditions, seasonal fluctuations, natural disasters and environmental matters, including the effects of climate change, may adversely affect our results of operations.
Even if available, additional financing may involve significant cash payment obligations, covenants and financial ratios that restrict our ability to operate and grow our business, and would cause us to incur additional interest expense and financing costs. 22 The market price of our common stock may be volatile and our shareholders may lose all or part of their investment.
The unavailability of financing when needed may adversely affect our growth and other plans, as well as our financial condition. Even if available, additional financing may involve significant cash payment obligations, covenants and financial ratios that restrict our ability to operate and grow our business and would cause us to incur additional interest expense and financing costs.
As part of our marketing efforts, we use a variety of digital platforms including search engines, mobile, online videos and social media platforms such as Facebook®, Twitter®, Instagram® and TikTok to attract and retain guests.
The dissemination of information online regarding our Company or our restaurants, together with any resulting negative publicity, may harm our business, prospects, financial condition and results of operations, regardless of the information’s accuracy. 15 As part of our marketing efforts, we use a variety of digital platforms including search engines, mobile, online videos and social media platforms such as Facebook®, Twitter®, Instagram® and TikTok® to attract and retain guests.
Consumers value readily available information concerning goods and services that they have or plan to purchase and may act on such information without further investigation or authentication. The dissemination of information online regarding our Company or our restaurants, together with any resulting negative publicity, may harm our business, prospects, financial condition and results of operations, regardless of the information’s accuracy.
Consumers value readily available information concerning goods and services that they have or plan to purchase and may act on such information without further investigation or authentication.
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However, they may ultimately adversely affect our business, financial condition and/or operating results.
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In addition, we cannot provide assurance that menu price increases will not deter guests from visiting our restaurants, reduce the frequency of their visits or affect their purchasing decisions.
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Risks Related to the COVID-19 Pandemic The COVID-19 pandemic has disrupted and may continue to disrupt our business, operations, financial condition and results of operations. Federal, state and local government responses to the COVID-19 pandemic have disrupted and may continue to disrupt our business.
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As reliance on technology continues to grow and more business activities have shifted online, the risk associated with any cybersecurity incidents have grown.
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During fiscal 2020, 2021, and early fiscal 2022, state and local governments imposed a variety of restrictions on people and businesses, and public health authorities offered regular guidance on health and safety, which have caused and may continue to cause consumers to avoid or limit gatherings in public places or social interactions.
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We continue to make significant investments in technology, third-party services and personnel to develop and implement systems and processes that are designed to anticipate cyber-attacks and to prevent or minimize breaches of our information technology systems or data loss, but these security measures cannot provide assurance that we will be successful in preventing such breaches or data loss.
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The impact of any health pandemic on us might be disproportionately greater than on other casual dining concepts that have lower guest traffic and that depend less on the social gathering of people.
Removed
It is possible that a resurgence in cases or further localized or widespread outbreaks of COVID-19 or new variants thereof could require us to reduce our capacity or suspend our in-restaurant dining operations.
Removed
The COVID-19 pandemic and these responses have affected and may continue to adversely affect our guest traffic, sales and operating costs, and we cannot predict whether an increase in cases or localized or widespread outbreaks will occur and whether future government responses thereto may impact us.
Removed
In addition, any resurgence of COVID-19 or variants thereof could negatively impact our suppliers, and we could face shortages of food items or other supplies at our restaurants, and our operations and sales could be adversely impacted by such supply interruptions. Risks Related to our Restaurant Business, Operations and Future Growth The restaurant industry is highly competitive.
Removed
Our inability or failure to successfully and sufficiently raise menu prices to offset rising costs and expenses may adversely affect guest traffic and our results of operations.
Removed
We utilize menu price increases to help offset the increased cost of commodities, minimum wage and other costs. However, there is no guarantee that our menu price increases will be accepted by our guests.
Removed
The good reputation of our restaurants is a key factor to the success of our business.
Removed
Any inability of us to secure or maintain third-party beer distribution arrangements may adversely affect our operating results. Pursuant to various laws and regulations, the majority of our proprietary craft beer must be distributed to our restaurants through independent wholesale beer distributors, whether we produce the beer or it is produced by independent third-party brewers.
Removed
Although we currently have arrangements with a sufficient number of beer distributors in all markets where we 18 operate restaurants, our continued national expansion will require us to enter into agreements with additional beer distributors. No assurance can be given that we will be able to maintain or secure additional beer distributors on terms favorable to us.
Removed
Changes in control or ownership of the participants in our current beer distribution network may lead to less willingness on the part of certain distributors to carry our proprietary craft beer. Our beer distribution agreements are generally terminable by the distributor on short notice.
Removed
Our ability to maintain our existing beer distribution agreements may also be adversely affected by the fact that many of our distributors are reliant on one of the major beer producers for a large percentage of their revenue and, therefore, they may be influenced by such producers.
Removed
If our existing beer distribution agreements are terminated, we may not be able to enter into new distribution agreements on substantially similar terms or it may take some time to enter into a replacement agreement, which may result in a disruption in the supply of our proprietary craft beer or an increase in the delivered cost of beer to our restaurants.
Removed
Any inability of our internal or independent third-party brewers to timely supply our beer may adversely affect our operating results.
Removed
If the independent third-party brewers cease doing business with us or cannot make a scheduled delivery to us because of a supply chain or production disruption or other issues, or if we cannot otherwise satisfy our internal brewing requirements, we may experience short-term supply shortages in some or all of our restaurants which may result in a loss of revenue.
Removed
Potential disruptions include labor issues, governmental and regulatory actions, quality issues, contractual disputes, machinery failures or operational shut downs.
Removed
Accordingly, there can be no guarantees that our proprietary brewing requirements will continue to be met in the future. From time to time, we or the independent third-party brewers and manufacturers may also experience shortages of kegs necessary to distribute our craft beer.
Removed
We distribute our craft beer in kegs that are currently owned by us; however, in the past we have also leased them from third-party vendors and we are responsible for providing kegs to the independent third-party brewers that produce our proprietary craft beer.
Removed
The unavailability of financing when needed may adversely affect our growth and other plans, as well as our financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePR OPERTIES RESTAURANT LOCATIONS As of February 27, 2023, we owned and operated a total of 216 restaurants located in the following 30 states: 23 Number of Restaurants Alabama 2 Arizona 7 Arkansas 2 California 60 Colorado 6 Connecticut 1 Florida 22 Illinois 1 Indiana 7 Kansas 1 Kentucky 3 Louisiana 3 Maryland 6 Massachusetts 2 Michigan 4 Nevada 7 New Jersey 2 New Mexico 2 New York 3 North Carolina 3 Ohio 14 Oklahoma 4 Oregon 2 Pennsylvania 4 Rhode Island 1 South Carolina 1 Tennessee 1 Texas 35 Virginia 6 Washington 4 216 All of our 216 existing restaurants are located on leased properties, and the average interior square footage is approximately 8,100 square feet.
Biggest changePR OPERTIES RESTAURANT LOCATIONS As of February 27, 2024, we owned and operated a total of 216 restaurants located in the following 30 states: Number of Restaurants Alabama 2 Arizona 7 Arkansas 2 California 59 Colorado 6 Connecticut 1 Florida 22 Illinois 1 Indiana 7 Kansas 1 Kentucky 3 Louisiana 3 Maryland 5 Massachusetts 2 Michigan 5 Nevada 7 New Jersey 2 New Mexico 2 New York 4 North Carolina 3 Ohio 13 Oklahoma 4 Oregon 2 Pennsylvania 4 Rhode Island 1 South Carolina 1 Tennessee 1 Texas 36 Virginia 6 Washington 4 216 All of our 216 existing restaurants are located on leased properties, with interior square footage primarily ranging between 7,000 to 8,500 square feet.
We own substantially all of the equipment, furnishings and trade fixtures in our restaurants. Our Restaurant Support Center is located in an approximate 56,000 square foot leased space in Huntington Beach, California. Our Restaurant Support Center lease expires August 31, 2024.
We own substantially all of the equipment, furnishings and trade fixtures in our restaurants. Our Restaurant Support Center is located in an approximate 57,000 square foot leased space in Huntington Beach, California.
Additional information concerning our leased properties is included in Note 6 to the Consolidated Financial Statements appearing in Part II, Item 8 of this Annual Report on Form 10-K.
Our Restaurant Support Center lease expires July 31, 2030. 23 Additional information concerning our leased properties is included in Note 6 to the Consolidated Financial Statements appearing in Part II, Item 8 of this Annual Report on Form 10-K.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS See Note 7 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for a summary of legal proceedings. ITEM 4. MINE SAFE TY DISCLOSURES Not applicable. 24 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS See Note 7 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for a summary of legal proceedings. ITEM 4. MINE SAFE TY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table sets forth information with respect to the repurchase of common shares during fiscal 2022: Period (1) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of the Publicly Announced Plans Increase in Dollars for Share Repurchase Authorization Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 12/29/22 - 01/25/22 — $ — — $ — $ 24,438,776 01/26/22 – 02/22/22 — $ — — $ — $ 24,438,776 02/23/22 – 03/29/22 — $ — — $ — $ 24,438,776 03/30/22 – 04/26/22 — $ — — $ — $ 24,438,776 04/27/22 – 05/24/22 — $ — — $ — $ 24,438,776 05/25/22 – 06/28/22 — $ — — $ — $ 24,438,776 06/29/22 – 07/26/22 — $ — — $ — $ 24,438,776 07/27/22 – 08/23/22 13,211 $ 27.51 13,211 $ — $ 24,075,364 08/24/22 – 09/27/22 78,091 $ 25.89 78,091 $ — $ 22,053,808 09/28/22 – 10/25/22 — $ — — $ — $ 22,053,808 10/26/22 – 11/22/22 — $ — — $ — $ 22,053,808 11/23/22 – 01/03/23 — $ — — $ — $ 22,053,808 Total 91,302 91,302 26 ITEM 6.
Biggest changeAs a result, we currently have approximately $61.1 million available under our authorized $550 million share repurchase program. 25 The following table sets forth information with respect to the repurchase of common shares during fiscal 2023: Period (1) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of the Publicly Announced Plans Increase in Dollars for Share Repurchase Authorization Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 01/04/23 - 01/31/23 — $ — — $ — $ 22,053,808 02/01/23 - 02/28/23 — $ — — $ — $ 22,053,808 03/01/23 - 04/04/23 — $ — — $ — $ 22,053,808 04/05/23 - 05/02/23 — $ — — $ — $ 22,053,808 05/03/23 - 05/30/23 — $ — — $ — $ 22,053,808 05/31/23 - 07/04/23 — $ — — $ — $ 22,053,808 07/05/23 - 08/01/23 — $ — — $ — $ 22,053,808 08/02/23 - 08/29/23 — $ — — $ — $ 22,053,808 08/30/23 - 10/03/23 164,330 $ 26.17 164,330 $ — $ 17,753,738 10/04/23 - 10/24/23 179,359 $ 23.41 179,359 $ — $ 13,554,903 10/25/23 - 11/21/23 77,976 $ 29.49 77,976 $ — $ 11,255,257 11/22/23 - 01/02/24 6,150 $ 32.53 6,150 $ — $ 11,055,206 Total 427,815 427,815 (1) Period information is presented in accordance with our fiscal months during fiscal 2023.
Further information concerning shareholdings of our officers, directors and principal shareholders, 25 as well as information regarding our stock-based compensation plans, is included or incorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.
Further information concerning shareholdings of our officers, directors and principal shareholders, as well as information regarding our stock-based compensation plans, is included or incorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.
As many of our shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. STOCK-PERFORMANCE GRAPH The Company has elected to use the S&P 600 Restaurant Group index as its peer group for fiscal 2022.
As many of our shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. STOCK-PERFORMANCE GRAPH The Company has elected to use the S&P 600 Restaurant Group index as its peer group for fiscal 2023.
The following chart compares the five-year cumulative total stock performance of our common stock, the S&P 600 Restaurant Group index and the S&P 500 index. The graph assumes that $100 was invested on December 31, 2017, in our common stock and in each of the indices and that all dividends were reinvested.
The following chart compares the five-year cumulative total stock performance of our common stock, the S&P 600 Restaurant Group index and the S&P 500 index. The graph assumes that $100 was invested on December 31, 2018, in our common stock and in each of the indices and that all dividends were reinvested.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHA REHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION Our common stock is traded on The NASDAQ Global Select Market under the symbol “BJRI.” As of February 27, 2023, we had approximately 138 shareholders of record.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHA REHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION Our common stock is traded on The NASDAQ Global Select Market under the symbol “BJRI.” As of February 27, 2024, we had approximately 134 shareholders of record.
The only cash dividends paid during fiscal 2022 were related to dividends declared prior to fiscal 2020, which vested under our stock compensation plans. As of January 3, 2023, we have cumulatively repurchased shares valued at approximately $477.9 million in accordance with our approved share repurchase plan since its inception in 2014.
The only cash dividends paid during fiscal 2023 were related to dividends declared prior to fiscal 2020, which vested under our stock-based compensation plans. As of January 2, 2024, we have cumulatively repurchased shares valued at approximately $488.9 million in accordance with our approved share repurchase plan since its inception in 2014.
We repurchased shares valued at approximately $2.4 million during fiscal 2022. The share repurchases were executed through open market purchases, and future share repurchases may be completed through a combination of individually negotiated transactions, accelerated share buyback, and/or open market purchases. As of January 3, 2023, we have approximately $22.1 million available under our share repurchase plan.
We repurchased shares valued at approximately $11.0 million during fiscal 2023. The share repurchases were executed through open market purchases, and future share repurchases may be completed through a combination of individually negotiated transactions, accelerated share buyback, and/or open market purchases. As of January 2, 2024, we had approximately $11.1 million available under our share repurchase plan.
CALCULATION OF AGGREGATE MARKET VALUE OF NON-AFFILIATE SHARES For purposes of calculating the aggregate market value of shares of our common stock held by non-affiliates as set forth on the cover page of this Annual Report on Form 10-K, we have assumed that all outstanding shares are held by non-affiliates, except for shares held by each of our executive officers, directors and 5% or greater shareholders.
The historical stock performance presented below is not intended to and may not be indicative of future stock performance. 24 CALCULATION OF AGGREGATE MARKET VALUE OF NON-AFFILIATE SHARES For purposes of calculating the aggregate market value of shares of our common stock held by non-affiliates as set forth on the cover page of this Annual Report on Form 10-K, we have assumed that all outstanding shares are held by non-affiliates, except for shares held by each of our executive officers, directors and 5% or greater shareholders.
The following table provides information about the shares of our common stock that may be issued upon exercise of awards as of January 3, 2023 (share numbers in thousands): Number of Securities to be Issued Upon Exercise of Outstanding Stock Options Weighted Average Exercise Price of Outstanding Stock Options Number of Securities Remaining Available for Future Issuance Under Stock-Based Compensation Plans Stock-based compensation plans approved by shareholders 1,676 $ 40.48 1,684 Stock-based compensation plans not approved by shareholders — — — Total 1,676 1,684 DIVIDEND POLICY AND STOCK REPURCHASES Due to the COVID-19 pandemic, we suspended quarterly cash dividends until such time as the Board of Directors determines that resumption of dividend payments is in the best interest of the Company and its shareholders.
The following table provides information about the shares of our common stock that may be issued upon exercise of awards as of January 2, 2024 (share numbers in thousands): Number of Securities to be Issued Upon Exercise of Outstanding Stock Options Weighted Average Exercise Price of Outstanding Stock Options Number of Securities Remaining Available for Future Issuance Under Stock-Based Compensation Plans Stock-based compensation plans approved by shareholders 867 $ 39.70 1,141 Stock-based compensation plans not approved by shareholders — — — Total 867 1,141 DIVIDEND POLICY AND STOCK REPURCHASES We currently do not pay any cash dividends.
The measurement points utilized in the graph consist of the last trading day in each calendar year, which closely approximates the last day of our respective fiscal year. The historical stock performance presented below is not intended to and may not be indicative of future stock performance.
The measurement points utilized in the graph consist of the last trading day in each calendar year, which closely approximates the last day of our respective fiscal year.
Added
Quarterly cash dividends were suspended in 2020 and any resumption of dividends will be subject to our Board of Directors determining that the resumption of dividend payments is in the best interest of the Company and its shareholders.
Added
In February 2024, our Board of Directors approved an increase in our share repurchase program by $50 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

57 edited+7 added−14 removed34 unchanged
Biggest changeFinancial Highlights for Fiscal 2022 Notable fiscal 2022 financial highlights compared to fiscal 2021 include: • Total revenues increased 18.1% to $1.3 billion (53 weeks vs. 52 weeks) • Total restaurant operating weeks increased 3.1% (53 weeks vs. 52 weeks) • Comparable restaurant sales increased 14.0% (53 weeks vs. 53 weeks) • Net income of $4.1 million compared to net loss of $3.6 million (53 weeks vs. 52 weeks) • Diluted net income per share of $0.17 compared to diluted net loss per share of $0.16 (53 weeks vs. 52 weeks) Key Performance Indicators and Non-GAAP Financial Measures Key measures that we use in evaluating our restaurants and assessing our business include the following: Comparable Restaurant Sales.
Biggest changeOur proprietary craft beer is produced at several of our locations, our Texas brewpub locations and by independent third-party brewers using our proprietary recipes. 26 Financial Highlights for Fiscal 2023 Notable fiscal 2023 financial highlights compared to fiscal 2022 include: • Total revenues increased 3.8% to $1.3 billion (52 weeks vs. 53 weeks) • Total restaurant operating weeks decreased 0.5% (52 weeks vs. 53 weeks) • Comparable restaurant sales increased 3.7% (52 weeks vs. 52 weeks) • Net income of $19.7 million compared to $4.1 million (52 weeks vs. 53 weeks) • Diluted net income per share of $0.82 compared to $0.17 (52 weeks vs. 53 weeks) Strategy to Increase Shareholder Value Our goal is to increase shareholder value by increasing our adjusted earnings before depreciation and amortization (Adjusted EBITDA), earnings per share and return on invested capital through: • Growing restaurant revenue through positive comparable sales and new restaurant growth • Increasing restaurant margins through sales leverage, cost savings and culinary and menu strategies • Enhancing new restaurant economics through restaurant margin improvement and new restaurant prototype optimization • Returning capital to shareholders through share repurchase program Key Performance Indicators and Non-GAAP Financial Measures Key measures that we use in evaluating our restaurants and assessing our business include the following: Comparable Restaurant Sales.
From time to time, we may also decide to purchase the underlying land for a new restaurant if that is the only way to secure a highly desirable site. Currently, we own the underlying land for our Texas brewpub locations. We also own two parcels of land adjacent to two of our restaurants.
From time to time, we may also decide to purchase the underlying land for a new restaurant if that is the only way to secure a highly desirable site. Currently, we own the underlying land for our Texas brewpub locations. We also own parcels of land adjacent to two of our restaurants.
Components of this category include corporate management, field supervision and corporate hourly staff salaries and related team member benefits (including stock-based compensation expense and cash-based incentive compensation), travel and relocation costs, information systems, the cost to recruit and train new restaurant management team members, corporate rent, certain brand marketing-related expenses and legal, professional and consulting fees. Depreciation and Amortization .
Components of this category include corporate management, field supervision and corporate hourly staff salaries and related team member benefits (including stock-based compensation expense and cash-based incentive compensation), travel and relocation costs, information systems, the cost to recruit and train new restaurant management team members, corporate rent, certain brand marketing-related expenses and legal and consulting fees. Depreciation and Amortization .
Our restaurants are typically open every day of the year except for Thanksgiving and Christmas. All of our restaurants currently offer take-out and delivery services. Additionally, all of our restaurants offer a call-ahead or online wait list, on-line ordering for dine-in, guest pick-up or curbside delivery and reservations for large parties.
Our restaurants are open every day of the year except for Thanksgiving and Christmas. All of our restaurants currently offer take-out and delivery services. Additionally, all of our restaurants offer a call-ahead or online wait list, on-line ordering for dine-in, guest pick-up or curbside delivery and reservations for large parties.
The components of cost of sales are variable and typically fluctuate directly with sales volumes, but may be impacted by changes in commodity prices, a shift in sales mix to higher cost proteins or other higher cost items, or varying levels of promotional activities. Labor and Benefits .
The components of cost of sales are variable and typically fluctuate directly with sales volumes but also may be impacted by changes in commodity prices, a shift in sales mix to higher cost proteins or other higher cost items, or varying levels of promotional activities. Labor and Benefits .
In calculating comparable restaurant sales, we include a restaurant in the comparable base once it has been open for 18 months. Guest traffic for our restaurants is estimated based on the number of guest checks. Cost of Sales .
In calculating comparable restaurant sales, we include a restaurant in the comparable base once it has been open for 18 months. Guest traffic for our restaurants is estimated based on the number of guest checks. 28 Cost of Sales .
Based on the current level of operations, we believe that our current cash and cash equivalents, coupled with cash generated from operations and availability under our credit agreement will be adequate to meet our capital expenditure and working capital needs for at least the next twelve months.
Based on current operations, we believe that our current cash and cash equivalents, coupled with cash generated from operations and availability under our credit agreement will be adequate to meet our capital expenditure and working capital needs for at least the next twelve months.
Our future operating performance will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. Similar to many restaurant chains, we typically utilize operating lease arrangements (principally ground leases) for the majority of our restaurant locations.
Our future operating performance will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. Similar to many restaurant chains, we typically utilize operating lease arrangements (principally ground leases) for our restaurant locations.
Labor and benefit costs include direct hourly and management wages, bonuses, payroll taxes, fringe benefits and stock-based compensation and workers’ compensation expense that is directly related to restaurant level team members. Occupancy and Operating .
Labor and benefit costs include direct hourly and management wages, bonuses, payroll taxes, fringe benefits and stock-based compensation, and workers’ compensation expense that are directly related to restaurant level team members. Occupancy and Operating .
Occupancy and operating expenses include restaurant supplies, credit card fees, third-party delivery company commissions, marketing costs, fixed rent, percentage rent, common area maintenance charges, utilities, real estate taxes, repairs and maintenance and other related restaurant costs. During fiscal 2020 and 2021, occupancy and operating expense also include COVID-19 related costs such as temporary patios and safety related items.
Occupancy and operating expenses include restaurant supplies, credit card fees, third-party delivery company commissions, marketing costs, fixed rent, percentage rent, common area maintenance charges, utilities, real estate taxes, repairs and maintenance and other related restaurant costs. During fiscal 2021, occupancy and operating expenses also include COVID-19 related costs such as temporary patios and safety related items. General and Administrative .
In fiscal 2022, these costs primarily relate to the impairment and reduction in the carrying value of the long-lived related to eight restaurants, coupled with the disposals of assets in conjunction with initiatives to keep our restaurants up to date, offset by the $4.9 million gain on disposal of an internally developed software.
In fiscal 2022, these costs primarily relate to the impairment and reduction in the carrying value of the long-lived assets related to eight restaurants, coupled with the disposals of assets in conjunction with initiatives to keep our restaurants up to date, offset by the $4.9 million gain on disposal of an internally developed software. 30 Gain on Lease Transactions, Net .
Our MD&A consists of the following sections: • Overview - a brief description of our business, financial highlights, key performance indicators, known and anticipated trends • Results of Operations - an analysis of our Consolidated Statements of Operations for fiscal year 2022 compared to fiscal year 2021 • Liquidity and Capital Resources - an analysis of cash flows, including capital expenditures, share issuance and repurchase activity, dividends, contractual obligations and commitments, and known trends that may impact liquidity • Critical Accounting Policies and Estimates - a discussion of accounting policies that require critical judgments and estimates, including new accounting standards OVERVIEW As of February 27, 2023, we owned and operated 216 restaurants located in 30 states as described in Item 2 - Properties - “Restaurant Locations” in this Form 10-K.
Our MD&A consists of the following sections: • Overview - a brief description of our business, financial highlights, strategy to increase shareholder value, key performance indicators, known and anticipated trends • Results of Operations - an analysis of our Consolidated Statements of Operations for fiscal year 2023 compared to fiscal year 2022 • Liquidity and Capital Resources - an analysis of cash flows, including capital expenditures, share issuance and repurchase activity, dividends, contractual obligations and commitments, and known trends that may impact liquidity • Critical Accounting Policies and Estimates - a discussion of accounting policies that require critical judgments and estimates, including new accounting standards, when applicable OVERVIEW As of February 27, 2024, we owned and operated 216 restaurants located in 30 states as described in Item 2 - Properties - “Restaurant Locations” in this Form 10-K.
As of January 3, 2023, we are not involved in any off-balance sheet arrangements. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our significant accounting policies are more fully described in Note 1 of Notes to Consolidated Financial Statements in Part IV, Item 15.
As of January 2, 2024, we are not involved in any off-balance sheet arrangements. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our significant accounting policies are more fully described in Note 1 of Notes to Consolidated Financial Statements in Part IV, Item 15.
Included in labor and benefits for fiscal 2022 and 2021 was approximately $2.9 million and $2.7 million, respectively, or 0.2% and 0.3%, of revenues, respectively, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members. Occupancy and Operating .
Included in labor and benefits for fiscal 2023 and 2022 was approximately $2.6 million and $2.9 million, respectively, or 0.2% of revenues, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members. Occupancy and Operating .
We calculate each restaurant’s average weekly revenue to understand and manage the business trends and expectations. Our weekly sales average was approximately $113,000, $99,000 and $72,000 for fiscal 2022, 2021 and 2020, respectively. Known or Anticipated Trends Sales Growth .
We calculate each restaurant’s average weekly revenue to understand and manage the business trends and expectations. Our weekly sales average was approximately $118,000, $113,000 and $99,000 for fiscal 2023, 2022 and 2021, respectively. Known or Anticipated Trends Sales Growth .
Contractual Obligations and Commitments We believe we have sufficient liquidity to fund our operations and meet our short-term and long-term obligations. The following table summarizes our future estimated cash payments under existing contractual obligations as of January 3, 2023, including estimated cash payments due by period (in thousands).
Contractual Obligations and Commitments 32 We believe we have sufficient liquidity to fund our operations and meet our short-term and long-term obligations. The following table summarizes our future estimated cash payments under existing contractual obligations as of January 2, 2024, including estimated cash payments due by period (in thousands).
(2) Amounts represent non-cancelable commitments for the purchase of goods and other services. (3) We have assumed that $60.0 million remains outstanding under our Credit Facility until the maturity date of November 3, 2026, using the interest rate in effect on January 3, 2023, which was approximately 6.4%.
(2) Amounts represent non-cancelable commitments for the purchase of goods and other services. (3) We have assumed that $68.0 million remains outstanding under our Credit Facility until the maturity date of November 3, 2026, using the interest rate in effect on January 2, 2024, which was approximately 6.9%.
Included in general and administrative costs for fiscal 2022 and 2021 was approximately $7.2 million and $7.6 million, respectively, or 0.6% and 0.7% of revenues, respectively, of stock-based compensation expense. As a percentage of revenues, general and administrative expenses decreased to 5.7% for fiscal 2022 from 6.3% for the prior fiscal year.
Included in general and administrative costs for fiscal 2023 and 2022 was approximately $8.3 million and $7.2 million, respectively, or 0.6% of revenues, of stock-based compensation expense. As a percentage of revenues, general and administrative expenses increased to 6.2% for fiscal 2023 from 5.7% for the prior fiscal year.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our fiscal 2021 Form 10-K, which was filed with the United States Securities and Exchange Commission on February 25, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our fiscal 2022 Form 10-K, which was filed with the United States Securities and Exchange Commission on February 28, 2023.
Amounts paid with a credit card are recorded in accounts and other receivables until payment is collected from the credit card processor. We sell gift cards which do not have an expiration date, and we do not deduct non-usage fees from outstanding gift card balances.
Revenues from restaurant sales are recognized when payment is tendered. Amounts paid with a credit card are recorded in accounts and other receivables until payment is collected from the credit card processor. We sell gift cards which do not have an expiration date, and we do not deduct non-usage fees from outstanding gift card balances.
General and Administrative . General and administrative costs include all corporate administrative functions that support existing operations and provide infrastructure to facilitate our future growth.
General and administrative expenses include costs for our corporate administrative functions that support existing operations and provide infrastructure to facilitate our future growth.
This estimate includes costs to open five new restaurants and remodel more than 30 existing locations. Total capital expenditures exclude anticipated proceeds from tenant improvement allowances. We expect to fund our net capital expenditures with our current cash balance on hand, cash flows from operations and our line of credit.
This estimate includes costs to open new restaurants and remodel existing locations and excludes anticipated proceeds from tenant improvement allowances. We expect to fund our net capital expenditures with our current cash balance on hand, cash flows from operations and our line of credit.
In calculating comparable restaurant sales, we include a restaurant in the comparable base once it has been open for 18 months. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and closures. Comparable restaurant sales increased 14.0% for fiscal 2022 on a 53 week basis. Restaurant Level Operating Margin .
In calculating comparable restaurant sales, we include a restaurant in the comparable base once it has been open for 18 months. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and closures. Comparable restaurant sales increased 3.7% for fiscal 2023 on a 52-week basis. Restaurant Level Operating Margin .
Gain on Lease Transactions, Net . Gain on lease transactions, net, was $3.3 million during fiscal 2022, which related to the sale of the land underlying one of our restaurants. Interest Expense, Net . Interest expense, net, decreased by $2.1 million to $2.9 million during fiscal 2022, compared to $5.0 million during fiscal 2021.
Gain on lease transactions, net, was $3.3 million during fiscal 2022, which related to the sale of the land underlying one of our restaurants. Interest Expense, Net . Interest expense, net, increased by $2.0 million to $4.9 million during fiscal 2023, compared to $2.9 million during fiscal 2022.
We currently plan to open as many as five new restaurants in fiscal 2023, and we have entered into signed leases, land purchase agreements or letters of intent for all of our 2023 new restaurant locations. We currently anticipate our total capital expenditures for fiscal 2023 to be approximately $90 million to $95 million.
We currently plan to open three new restaurants in fiscal 2024, and we have entered into signed leases, land purchase agreements or letters of intent for all of our 2024 new restaurant locations. We currently anticipate our total capital expenditures for fiscal 2024 to be approximately $70 million to $75 million.
The effective tax rate benefit for fiscal 2022 and 2021 was different than the statutory tax rate primarily due to FICA tax tip credits. 31 52 WEEKS ENDED DECEMBER 28, 2021 (FISCAL 2021) COMPARED TO THE 52 WEEKS ENDED DECEMBER 29, 2020 (FISCAL 2020) For discussion related to the results of operations and changes in financial condition for fiscal 2021 compared to fiscal 2020 refer to Part II, Item 7.
The effective tax rate benefit for fiscal 2023 and 2022 was different than the statutory tax rate primarily due to Federal Insurance Contributions Act (“FICA”) tax tip credits. 53 WEEKS ENDED JANUARY 3, 2023 (FISCAL 2022) COMPARED TO THE 52 WEEKS ENDED DECEMBER 28, 2021 (FISCAL 2021) For discussion related to the results of operations and changes in financial condition for fiscal 2022 compared to fiscal 2021 refer to Part II, Item 7.
A reconciliation of loss from operations to restaurant level operating margin for fiscal 2022, 2021 and 2020 is set forth below: 27 Fiscal Year 2022 2021 2020 Loss from operations $ (5,480 ) (0.4 )% $ (16,507 ) (1.5 )% $ (86,431 ) (11.1 )% General and administrative 73,333 5.7 67,957 6.3 54,663 7.0 Depreciation and amortization 70,385 5.5 72,753 6.7 73,124 9.4 Restaurant opening 3,644 0.3 1,483 0.1 1,201 0.2 Loss on disposal and impairment of assets, net 6,200 0.5 3,946 0.4 17,141 2.2 Gain on lease transactions, net (3,318 ) (0.3 ) — — (3,278 ) (0.4 ) Restaurant level operating margin $ 144,764 11.3 % $ 129,632 11.9 % $ 56,420 7.2 % Adjusted EBITDA.
A reconciliation of income (loss) from operations to restaurant level operating margin for fiscal 2023, 2022 and 2021 is set forth below: Fiscal Year 2023 2022 2021 Income (loss) from operations $ 13,759 1.0 % $ (5,480 ) (0.4 )% $ (16,507 ) (1.5 )% General and administrative 82,103 6.2 73,333 5.7 67,957 6.3 Depreciation and amortization 70,992 5.3 70,385 5.5 72,753 6.7 Restaurant opening 2,808 0.2 3,644 0.3 1,483 0.1 Loss on disposal and impairment of assets, net 8,125 0.6 6,200 0.5 3,946 0.4 Gain on lease transactions, net — — (3,318 ) (0.3 ) — — Restaurant level operating margin $ 177,787 13.3 % $ 144,764 11.3 % $ 129,632 11.9 % Adjusted EBITDA.
The following table provides, for the years indicated, the components of capital expenditures (dollar amounts in thousands): Fiscal Year 2022 2021 2020 New restaurants $ 43,778 $ 20,167 $ 17,780 Restaurant maintenance and remodels, and key productivity initiatives 31,471 19,539 23,219 Restaurant and corporate systems 3,357 2,483 2,326 Total capital expenditures $ 78,606 $ 42,189 $ 43,325 During fiscal 2022, we opened six new restaurants and closed two restaurants.
The following table provides, for the years indicated, the components of capital expenditures (dollar amounts in thousands): Fiscal Year 2023 2022 2021 New restaurants $ 39,942 $ 43,778 $ 20,167 Restaurant maintenance and remodels, and productivity initiatives 57,631 31,471 19,539 Restaurant and corporate systems 1,341 3,357 2,483 Total capital expenditures $ 98,914 $ 78,606 $ 42,189 During fiscal 2023, we opened five new restaurants and closed five restaurants.
A reconciliation of net income (loss) to adjusted EBITDA for fiscal 2022, 2021 and 2020 is set forth below: Fiscal Year 2022 2021 2020 Net income (loss) $ 4,076 0.3 % $ (3,606 ) (0.3 )% $ (57,885 ) (7.4 )% Interest expense, net 2,888 0.2 5,002 0.5 7,078 0.9 Income tax benefit (12,384 ) (1.0 ) (15,576 ) (1.4 ) (32,065 ) (4.1 ) Depreciation and amortization 70,385 5.5 72,753 6.7 73,124 9.4 Stock-based compensation expense 10,098 0.8 10,331 1.0 9,791 1.3 Other income, net (60 ) — (2,327 ) (0.2 ) (1,275 ) (0.2 ) Loss on disposal and impairment of assets, net 6,200 0.5 3,946 0.4 17,141 2.2 Gain from legal settlements — — — — (2,284 ) (0.3 ) Gain on lease transactions, net (3,318 ) (0.3 ) — — (3,278 ) (0.4 ) Adjusted EBITDA $ 77,885 6.1 % $ 70,523 6.5 % $ 10,347 1.3 % Weekly Sales Average.
A reconciliation of net income (loss) to Adjusted EBITDA for fiscal 2023, 2022 and 2021 is set forth below: 27 Fiscal Year 2023 2022 2021 Net income (loss) $ 19,660 1.5 % $ 4,076 0.3 % $ (3,606 ) (0.3 )% Interest expense, net 4,915 0.4 2,888 0.2 5,002 0.5 Income tax benefit (9,560 ) (0.7 ) (12,384 ) (1.0 ) (15,576 ) (1.4 ) Depreciation and amortization 70,992 5.3 70,385 5.5 72,753 6.7 Stock-based compensation expense 10,902 0.8 10,098 0.8 10,331 1.0 Other income, net (1,256 ) (0.1 ) (60 ) — (2,327 ) (0.2 ) Loss on disposal and impairment of assets, net 8,125 0.6 6,200 0.5 3,946 0.4 Gain on lease transactions, net — — (3,318 ) (0.3 ) — — Adjusted EBITDA $ 103,778 7.8 % $ 77,885 6.1 % $ 70,523 6.5 % Weekly Sales Average.
Restaurant opening expenses, which are expensed as incurred, consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stock of operating supplies and other direct costs related to the opening of a restaurant, including rent during the construction and in-restaurant training period. 29 RESULTS OF OPERATIONS The following table sets forth, for the years indicated, our Consolidated Statements of Operations both in dollars and as percentages of total revenues.
Restaurant opening expenses, which are expensed as incurred, consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stock of operating supplies and other direct costs related to the opening of a restaurant, including rent during the construction and in-restaurant training period.
Total revenues increased by $197.0 million, or 18.1%, to $1.3 billion during fiscal 2022, compared to $1.1 billion during fiscal 2021. The increase in revenues primarily consisted of a $172.8 million increase in sales from our restaurants in our comparable sales base, and a $21.0 million increase in sales from new restaurants not yet in our comparable restaurant sales base.
Total revenues increased by $49.3 million, or 3.8%, to $1.33 billion during fiscal 2023, compared to $1.28 billion during fiscal 2022. The increase in revenues primarily consisted of a 3.7%, or $45.1 million, increase in comparable restaurant sales, and a $42.5 million increase in sales from new restaurants not yet in our comparable restaurant sales base.
Our menu features BJ’s award‑winning, signature deep-dish pizza, our proprietary craft and other beers, as well as a wide selection of appetizers, entrées, pastas, sandwiches, specialty salads and desserts, including our Pizookie® dessert. Our proprietary craft beer is produced at several of our locations, our Texas brewpub locations and by independent third-party brewers using our proprietary recipes.
Our menu features BJ’s award‑winning, signature deep-dish pizza, our proprietary craft and other beers, as well as a wide selection of appetizers, entrées, pastas, sandwiches, specialty salads and desserts, including our Pizookie® dessert.
Fiscal Year 2022 2021 2020 Revenues $ 1,283,926 100.0 % $ 1,087,038 100.0 % $ 778,510 100.0 % Restaurant operating costs (excluding depreciation and amortization): Cost of sales 349,645 27.2 288,110 26.5 195,573 25.1 Labor and benefits 483,367 37.6 401,408 36.9 305,628 39.3 Occupancy and operating 306,150 23.8 267,888 24.6 220,889 28.4 General and administrative 73,333 5.7 67,957 6.3 54,663 7.0 Depreciation and amortization 70,385 5.5 72,753 6.7 73,124 9.4 Restaurant opening 3,644 0.3 1,483 0.1 1,201 0.2 Loss on disposal and impairment of assets, net 6,200 0.5 3,946 0.4 17,141 2.2 Gain on lease transactions, net (3,318 ) (0.3 ) — — (3,278 ) (0.4 ) Total costs and expenses 1,289,406 100.4 1,103,545 101.5 864,941 111.1 Loss from operations (5,480 ) (0.4 ) (16,507 ) (1.5 ) (86,431 ) (11.1 ) Other (expense) income: Interest expense, net (2,888 ) (0.2 ) (5,002 ) (0.5 ) (7,078 ) (0.9 ) Gain from legal settlements — — — — 2,284 0.3 Other income, net 60 — 2,327 0.2 1,275 0.2 Total other expense (2,828 ) (0.2 ) (2,675 ) (0.2 ) (3,519 ) (0.5 ) Loss before income taxes (8,308 ) (0.6 ) (19,182 ) (1.8 ) (89,950 ) (11.6 ) Income tax benefit (12,384 ) (1.0 ) (15,576 ) (1.4 ) (32,065 ) (4.1 ) Net income (loss) $ 4,076 0.3 % $ (3,606 ) (0.3 )% $ (57,885 ) (7.4 )% 53 WEEKS ENDED JANUARY 3, 2023 (FISCAL 2022) COMPARED TO THE 52 WEEKS ENDED DECEMBER 28, 2021 (FISCAL 2021) Revenues .
Fiscal Year 2023 2022 2021 Revenues $ 1,333,229 100.0 % $ 1,283,926 100.0 % $ 1,087,038 100.0 % Restaurant operating costs (excluding depreciation and amortization): Cost of sales 346,569 26.0 349,645 27.2 288,110 26.5 Labor and benefits 491,314 36.9 483,367 37.6 401,408 36.9 Occupancy and operating 317,559 23.8 306,150 23.8 267,888 24.6 General and administrative 82,103 6.2 73,333 5.7 67,957 6.3 Depreciation and amortization 70,992 5.3 70,385 5.5 72,753 6.7 Restaurant opening 2,808 0.2 3,644 0.3 1,483 0.1 Loss on disposal and impairment of assets, net 8,125 0.6 6,200 0.5 3,946 0.4 Gain on lease transactions, net — — (3,318 ) (0.3 ) — — Total costs and expenses 1,319,470 99.0 1,289,406 100.4 1,103,545 101.5 Income (loss) from operations 13,759 1.0 (5,480 ) (0.4 ) (16,507 ) (1.5 ) Other (expense) income: Interest expense, net (4,915 ) (0.4 ) (2,888 ) (0.2 ) (5,002 ) (0.5 ) Other income, net 1,256 0.1 60 — 2,327 0.2 Total other expense (3,659 ) (0.3 ) (2,828 ) (0.2 ) (2,675 ) (0.2 ) Income (loss) before income taxes 10,100 0.8 (8,308 ) (0.6 ) (19,182 ) (1.8 ) Income tax benefit (9,560 ) (0.7 ) (12,384 ) (1.0 ) (15,576 ) (1.4 ) Net income (loss) $ 19,660 1.5 % $ 4,076 0.3 % $ (3,606 ) (0.3 )% 29 52 WEEKS ENDED JANUARY 2, 2024 (FISCAL 2023) COMPARED TO THE 53 WEEKS ENDED JANUARY 3, 2023 (FISCAL 2022) Revenues .
The decrease over the prior year is primarily due to the timing of payments for accrued expenses, offset by current year net income as compared to the prior year net loss. Investing Cash Flows Net cash used in investing activities was $71.9 million during fiscal 2022, representing a $29.7 million increase from the $42.2 million used in fiscal 2021.
The increase over the prior year is primarily due to an increase in net income, coupled with the timing of payments for accrued expenses. Investing Cash Flows Net cash used in investing activities was $98.9 million during fiscal 2023, representing a $27.0 million increase compared to the $71.9 million used in fiscal 2022.
During fiscal 2021 and 2022, heightened inflation had a material impact on our operations, new restaurant construction and corresponding return on invested capital.
Inflation has had an impact on our operations, new restaurant construction and corresponding return on invested capital.
This increase in comparable restaurant sales was the result of an increase in guest traffic of approximately 9.3% and an increase in average check of approximately 4.7%, due to menu price increases partially offset by changes in mix.
The increase in comparable restaurant sales was the result of an increase in average check of approximately 6.5%, due to menu price increases coupled with changes in mix, offset by a decrease in guest traffic of approximately 2.8%. Cost of Sales .
Occupancy and operating expenses increased by $38.3 million, or 14.3%, to $306.1 million during fiscal 2022, compared to $267.9 million during fiscal 2021.
Occupancy and operating expenses increased by $11.4 million, or 3.7%, to $317.6 million during fiscal 2023, compared to $306.1 million during fiscal 2022.
Increases in inflation could have a severe impact on the United States and global economies, which will have an adverse impact on our business, financial condition and results of operations. From time to time, competitive conditions will limit our menu pricing flexibility.
Increases in inflation could have a severe impact on the United States and global economies, which will have an adverse impact on our business, financial condition and results of operations. In addition, macroeconomic conditions that impact consumer discretionary spending for food away from home could make additional menu price increases imprudent.
CASH FLOWS The following tables set forth, for the years indicated, our cash flows from operating, investing, and financing activities (dollar amounts in thousands): Fiscal Year 2022 2021 2020 Net cash provided by operating activities $ 51,122 $ 64,285 $ 40,541 Net cash used in investing activities (71,907 ) (42,168 ) (35,716 ) Net cash provided by (used in) financing activities 7,131 (35,254 ) 24,445 Net (decrease) increase in cash and cash equivalents $ (13,654 ) $ (13,137 ) $ 29,270 32 Operating Cash Flows Net cash provided by operating activities was $51.1 million during fiscal 2022, representing a $13.2 million decrease from the $64.3 million provided during fiscal 2021.
We own substantially all of the equipment, furniture and trade fixtures in our restaurants and currently plan to do so in the future. 31 CASH FLOWS The following tables set forth, for the years indicated, our cash flows from operating, investing, and financing activities (dollar amounts in thousands): Fiscal Year 2023 2022 2021 Net cash provided by operating activities $ 105,837 $ 51,122 $ 64,285 Net cash used in investing activities (98,911 ) (71,907 ) (42,168 ) Net cash (used in) provided by financing activities (2,729 ) 7,131 (35,254 ) Net increase (decrease) in cash and cash equivalents $ 4,197 $ (13,654 ) $ (13,137 ) Operating Cash Flows Net cash provided by operating activities was $105.8 million during fiscal 2023, representing a $54.7 million increase compared to the $51.1 million provided during fiscal 2022.
We opened six new restaurants during fiscal 2022, compared to two new restaurants during fiscal 2021. Loss on Disposal and Impairment of Assets, Net . Loss on disposal and impairment of assets, net, was $6.2 million during fiscal 2022, compared to $3.9 million during fiscal 2021.
Loss on Disposal and Impairment of Assets, Net . Loss on disposal and impairment of assets, net, was $8.1 million during fiscal 2023, compared to $6.2 million during fiscal 2022.
All fiscal years presented consist of 52 weeks with the exception of fiscal year 2022, which consists of 53 weeks. Percentages below may not reconcile due to rounding.
RESULTS OF OPERATIONS The following table sets forth, for the years indicated, our Consolidated Statements of Operations both in dollars and as percentages of total revenues. All fiscal years presented consist of 52 weeks with the exception of fiscal year 2022, which consists of 53 weeks. Percentages below may not reconcile due to rounding.
This decrease was primarily due to a higher revenue base and lower depreciation and amortization. Restaurant Opening . Restaurant opening expense increased by $2.2 million, or 145.6%, to $3.6 million during fiscal 2022, compared to $1.5 million during fiscal 2021. This increase was primarily due to the timing of our openings and increased costs.
This decrease was primarily due to a higher revenue base. Restaurant Opening . Restaurant opening expense decreased by $0.8 million, or 22.9%, to $2.8 million during fiscal 2023, compared to $3.6 million during fiscal 2022. This decrease was primarily due to one less restaurant opening in fiscal 2023, coupled with the timing of our openings.
Significant judgment is required to estimate claims incurred but not yet reported to us (“IBNR claims”) as parties have yet to assert such claims. Should a greater number of claims occur compared to what was estimated, or should medical costs increase beyond what was expected, accruals might not be sufficient, and additional expense may be recorded.
Should a greater number of claims occur compared to what was estimated, or should medical costs increase beyond what was expected, accruals might not be sufficient, and additional expense may be recorded. 33 NEW ACCOUNTING STANDARDS Not applicable.
Financing Cash Flows Net cash provided by financing activities was $7.1 million during fiscal 2022, representing a $42.4 million increase from the $35.3 million used in fiscal 2021. This increase was primarily due to lower payments on our line of credit, partially offset by no common stock issuances or stock option exercises and repurchases of common stock.
Financing Cash Flows Net cash used in financing activities was $2.7 million during fiscal 2023, representing a $9.9 million increase in cash used compared to the $7.1 million provided by in fiscal 2022. This increase was primarily due to an increase in common stock repurchases.
The decrease in depreciation and amortization was partially offset by depreciation expense related to our six new restaurants opened during fiscal 2022 and the impact of the 53rd week. As a percentage of revenues, depreciation and amortization decreased to 5.5% for fiscal 2022 from 6.7% for the prior fiscal year.
This increase was offset by the decrease in depreciation and amortization related to impairment and disposal charges taken in the prior year, including the impairment and reduction of carrying value for the closure of five restaurants during fiscal 2023. As a percentage of revenues, depreciation and amortization decreased to 5.3% for fiscal 2023 from 5.5% for the prior fiscal year.
The increase over prior year is primarily due to an increase in the number of new restaurant openings, new restaurants under construction and key productivity initiatives.
The increase over prior year is primarily due an increase in restaurant remodel activity, offset by the timing of new restaurants opened.
This increase was primarily due to the increase in revenue, commodity cost increases and costs related to our six new restaurants opened during fiscal 2022, coupled with the impact of the 53rd week. As a percentage of revenues, cost of sales increased to 27.2% for fiscal 2022 from 26.5% for the prior fiscal year.
As a percentage of revenues, cost of sales decreased to 26.0% for fiscal 2023 from 27.2% for the prior fiscal year. This decrease was primarily due to the easing of inflationary pressure on food costs, coupled with increased revenues from menu price increases and the effects of our cost savings initiatives. Labor and Benefits .
This was primarily due to increases of $9.0 million in utilities, $7.0 million in supply costs, $6.6 million in marketing expenses, $4.6 million in merchant credit card fees, $3.5 million in janitorial services related to the re-opening of our dining rooms, and $3.8 million in rent related expenses.
This was primarily due to increases of $3.5 million in rent-related expenses, $2.3 million related to restaurant facilities expenses, $3.1 million in third-party delivery company fees and expenses, $0.6 million in utilities, $2.1 million in marketing expenditures, and $1.8 million in merchant credit card fees, offset by a decrease of $2.1 million in supplies.
This was primarily due to increases of $4.7 million in personnel costs, $1.5 million in outside services as we returned closer to pre-pandemic operations and have invested in growth initiatives, and $1.2 million in travel expenses, offset by a $2.7 million decrease in our deferred compensation plan liability. These increases include the impact of the 53rd week.
This was primarily due to increases of $7.4 million in personnel costs, including a $3.0 million increase related to our deferred compensation liability and $2.1 million related to incentive compensation, a $1.7 million increase in corporate expenses, and a $1.3 million increase in legal expenses offset by decreases of $0.4 million in rent related expenses, $0.5 million in office expenses, $0.4 million in recruiting related expenses and $0.4 million in outside services.
This decrease was primarily due to lower average debt balance during fiscal 2022, compared to fiscal 2021. Income Tax (Benefit) Expense . Our effective income tax rate for fiscal 2022 reflected a 149.1% tax benefit compared to an 81.2% tax benefit for fiscal 2021.
Income Tax Benefit . Our effective income tax rate for fiscal 2023 reflected a 94.7% tax benefit compared to a 149.1% tax benefit for fiscal 2022.
These increases include the impact related to the six new restaurants opened during fiscal 2022, and the 53rd week. Increases in labor and benefit costs were offset in part by the closure of two restaurants during fiscal 2022. As a percentage of revenues, labor and benefit costs increased to 37.6% for fiscal 2022 from 36.9% for the prior fiscal year.
This was primarily due to $1.3 million related to higher hourly labor, $4.6 million related to higher management labor and incentive compensation, and the additional labor related to our five new restaurants opened during fiscal 2023. As a percentage of revenues, labor and benefit costs decreased to 36.9% for fiscal 2023 from 37.6% for the prior fiscal year.
This increase was primarily due to inflationary pressure on food costs, partially mitigated by menu price increases. Labor and Benefits . Labor and benefit costs for our restaurants increased by $82.0 million, or 20.4%, to $483.4 million during fiscal 2022, compared to $401.4 million during fiscal 2021.
Labor and benefit costs for our restaurants increased by $7.9 million, or 1.6%, to $491.3 million during fiscal 2022, compared to $483.4 million during fiscal 2022.
Payments Due by Period Total Less Than 1 Year 2-3 Years 4-5 Years After 5 Years Contractual Obligations: Operating leases (1) $ 597,279 $ 66,032 $ 120,715 $ 110,156 $ 300,376 Purchase obligations (2) 15,104 14,769 335 — — Total $ 612,383 $ 80,801 $ 121,050 $ 110,156 $ 300,376 Other Obligations: Long-term debt $ 60,000 $ — $ — $ 60,000 $ — Interest (3) 14,635 3,803 7,616 3,216 — Standby letters of credit 16,214 — — 16,214 — Total $ 90,849 $ 3,803 $ 7,616 $ 79,430 $ — 33 (1) For a more detailed description of our operating leases, refer to Note 6 in the accompanying Consolidated Financial Statements.
Payments Due by Period Total Less Than 1 Year 2-3 Years 4-5 Years After 5 Years Contractual Obligations: Operating leases (1) $ 557,278 $ 62,569 $ 121,210 $ 111,833 $ 261,666 Purchase obligations (2) 28,115 22,681 2,717 2,717 — Total $ 585,393 $ 85,250 $ 123,927 $ 114,550 $ 261,666 Other Obligations: Long-term debt $ 68,000 $ — $ 68,000 $ — $ — Interest (3) 13,380 4,697 8,683 — — Standby letters of credit 17,219 — 17,219 — — Total $ 98,599 $ 4,697 $ 93,902 $ — $ — (1) For a more detailed description of our operating leases, refer to Note 1 in the accompanying Consolidated Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES The following table provides, for the periods indicated, a summary of our key liquidity measurements (dollar amounts in thousands): January 3, 2023 December 28, 2021 Cash and cash equivalents $ 24,873 $ 38,527 Net working capital $ (114,600 ) $ (109,619 ) Current ratio 0.4:1.0 0.5:1.0 As a result of uncertainties in the near-term macro environment, including supply chain challenges, and commodity and labor inflation, we continue to focus on cash flow generation and maintaining a solid and flexible financial position to execute our long-term strategy of investing in our business and opening new restaurants.
LIQUIDITY AND CAPITAL RESOURCES The following table provides, for the periods indicated, a summary of our key liquidity measurements (dollar amounts in thousands): January 2, 2024 January 3, 2023 Cash and cash equivalents $ 29,070 $ 24,873 Net working capital $ (116,304 ) $ (114,600 ) Current ratio 0.4:1.0 0.4:1.0 Our capital requirements are driven by our fundamental financial objective to improve total shareholder return through a balanced approach of new restaurant expansion plans, enhancements and initiatives on existing restaurants, and return of capital to our shareholders through our share repurchase program.
In fiscal 2021, these costs were primarily related to the impairment and reduction in the carrying value of the long-lived and operating lease assets related to one of our restaurants, coupled with the disposals of assets in conjunction with initiatives to keep our restaurants up to date and the disposal of certain unproductive restaurant assets.
In fiscal 2023, these costs primarily relate to disposals of assets in conjunction with initiatives to keep our restaurants up to date, including our restaurant remodel initiative and the removal of glass partitions in our dining rooms that were installed during the pandemic, as well as the closure of five under-performing restaurants.
This decrease was primarily due to a higher revenue base. Depreciation and Amortization . Depreciation and amortization decreased by $2.4 million, or 3.3%, to $70.4 million during fiscal 2022, compared to $72.8 million during fiscal 2021.
This increase was primarily related to our increased deferred compensation liability and incentive compensation. Depreciation and Amortization . Depreciation and amortization increased by $0.6 million, or 0.9%, to $71.0 million during fiscal 2023, compared to $70.4 million during fiscal 2022. This increase in depreciation and amortization is related to our restaurants opened during fiscal 2023.
There can be no assurance that we will continue to generate increases in comparable restaurant sales in amounts sufficient to offset inflationary or other cost pressures. Accounting Terms and Characteristics Revenues . Our revenues are comprised of food and beverage sales from our restaurants. Revenues from restaurant sales are recognized when payment is tendered.
Whether we are able to continue to offset the effects of inflation will determine to what extent, if any, inflation affects our restaurant profitability in future periods. Accounting Terms and Characteristics Revenues . Our revenues are comprised of food and beverage sales from our restaurants, including takeout, delivery and catering sales.
Removed
In addition, macroeconomic conditions that impact consumer discretionary spending for food away from home could make additional menu price increases imprudent.
Added
Revenue increases were offset primarily by a $20.8 million decrease related to the shift in weeks due to the 53rd week in fiscal 2022 and an $11.1 million decrease related to closed restaurants.
Removed
There can be no assurance that all of our future cost increases can be offset by higher menu prices or that higher menu prices will be accepted by our restaurant 28 guests without any resulting changes in their visit frequencies or purchasing patterns.
Added
Cost of sales decreased by $3.1 million, or 0.9%, to $346.6 million during fiscal 2023, compared to $349.6 million during fiscal 2022. This decrease was primarily due to the impact of the 53rd week in fiscal 2022 and the closure of five restaurants since fiscal 2022, offset by costs of sales for our five new restaurants opened during fiscal 2023.
Removed
Many of the leases for our restaurants provide for contingent rent obligations based on a percentage of sales. As a result, rent expense will absorb a proportionate share of any menu price increases in our restaurants.
Added
This decrease was primarily due to our ability to leverage certain fixed costs over a higher revenue base, improved labor efficiency, better team member retention, and the effectiveness of our cost savings initiatives.
Removed
This increase was partially offset by $3.4 million related to the closure of two restaurants in fiscal 2022. The effect of the 53rd week in fiscal 2022 was $26.5 million in additional revenues. On a 53 week basis, comparable restaurant sales increased 14.0%.
Added
As a percentage of revenues, occupancy and operating expenses remained consistent at 23.8% for fiscal 2023 and the prior fiscal year. General and Administrative . General and administrative expenses increased by $8.8 million, or 12.0%, to $82.1 million during fiscal 2023, compared to $73.3 million during fiscal 2022.
Removed
The increase in guest traffic was primarily due to the re-opening of our dining rooms, which were closed or restricted in operation during portions of the same period in 2021. Cost of Sales . Cost of sales increased by $61.5 million, or 21.4%, to $349.6 million during fiscal 2022, compared to $288.1 million during fiscal 2021.
Added
This increase was primarily due to the increase in our weighted average interest rate year over year, coupled with a higher average outstanding debt balance. Other Income, Net . Other income, net, was $1.3 million during fiscal 2023, which related to the gain associated with the cash surrender value of certain life insurance policies under our deferred compensation plan.
Removed
This increase was primarily due to an increase in the number of team members, $64.4 million related to higher wages, $14.4 million related to taxes and benefits, and $3.7 million related to higher training costs due to the re-opening of our dining rooms, which were closed or had restricted operations during a portion of the same period in 2021, offset by lower workers compensation related costs.
Added
In addition, we want to maintain a flexible balance sheet to provide the financial resources necessary to manage the risks and uncertainties of conducting our business operations in a mature segment of the restaurant industry. In order to achieve these objectives, we use a combination of operating cash flows, funded debt, landlord allowances and proceeds from stock option exercises.
Removed
This increase was primarily due to higher wages, training and overtime hours due to increased hiring activities, the deleveraging impact from the COVID-19 Omicron variant wave, which severely 30 impacted sales in January 2022, and the benefit from our Employee Retention Tax Credit recognized during fiscal 2021.
Added
Significant judgment is required to estimate claims incurred but not yet reported to us (“IBNR claims”) as parties have yet to assert such claims.
Removed
These increases include the impact related to the six new restaurants opened during fiscal 2022, the 53rd week, and one restaurant that was re-opened in August 2021, partially offset by the closure of two restaurants during fiscal 2022. As a percentage of revenues, occupancy and operating expenses decreased to 23.8% for fiscal 2022 from 24.6% for the prior fiscal year.
Removed
This decrease was primarily due to our ability to leverage certain fixed operating and occupancy costs over a higher revenue base. General and Administrative . General and administrative expenses increased by $5.4 million, or 7.9%, to $73.3 million during fiscal 2022, compared to $68.0 million during fiscal 2021.
Removed
This decrease was primarily related to impairment and disposal charges taken in fiscal 2021, including the impairment and reduction of carrying value related to the closure of one restaurant at the beginning of the current fiscal year.
Removed
We continue to monitor the macro environment and will adjust our overall approach to capital allocation, including share repurchases and dividends, as the post-pandemic recovery unfolds. We are taking what we believe to be reasonably necessary and appropriate measures to control costs and maximize liquidity.
Removed
We own substantially all of the equipment, furniture and trade fixtures in our restaurants and currently plan to do so in the future.
Removed
Additionally, we have entered into lease agreements related to future restaurants with commencement dates subsequent to January 3, 2023. Our aggregate future commitment relating to these leases is $10.9 million and is not included in operating leases above.
Removed
NEW ACCOUNTING STANDARDS See Note 1 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for a discussion of recently adopted accounting standards.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−1 removed4 unchanged
Biggest changeAs a result of the lingering effects of the COVID-19 pandemic, we continue to experience distribution disruptions, commodity cost inflation and certain food and supply shortages. To manage this risk in part, we attempt to enter into fixed-price purchase commitments, with terms typically up to one year, for some of our commodity requirements.
Biggest changeTo manage this risk in part, we attempt to enter into fixed-price purchase commitments, with terms typically up to one year, for some of our commodity requirements. However, it may not be possible for us to enter into fixed-price contracts for certain commodities or we may choose not to enter into fixed-price contracts for certain commodities.
We are exposed to interest rate risk through fluctuations in interest rates on 34 our obligations under the Credit Facility. Based on our current outstanding balance, a hypothetical 1% change in the interest rates under our Credit Facility would have an approximate $0.5 million annual impact on our net income.
We are exposed to interest rate risk through fluctuations in interest rates on our obligations under the Credit Facility. Based on our current outstanding balance, a hypothetical 1% change in the interest rates under our Credit Facility would have an approximate $0.5 million annual impact on our net income.
As of January 3, 2023, $60 million was outstanding and carries interest at a floating rate. We utilize the Credit Facility principally for letters of credit that are required to support our self-insurance programs, to fund a portion of our announced share repurchase program, and for working capital and construction requirements, as needed.
As of January 2, 2024, $68.0 million was outstanding and carries interest at a floating rate. We utilize the Credit Facility principally for letters of credit that are required to support our self-insurance programs, to fund a portion of our announced share repurchase program, and for working capital and construction requirements, as needed.
We do not use financial instruments to hedge commodity prices, since our purchase arrangements with suppliers, to the extent that we can enter into such arrangements, help control the ultimate cost that we pay.
Some of our commodity purchase arrangements may contain contractual features that limit the price paid by establishing certain price floors or caps. We do not use financial instruments to hedge commodity prices, since our purchase arrangements with suppliers, to the extent that we can enter into such arrangements, help control the ultimate cost that we pay.
We also believe that we have some flexibility and ability to increase certain menu prices, or vary certain menu items offered or promoted, in response to food commodity price increases. Some of our commodity purchase arrangements may contain contractual features that limit the price paid by establishing certain price floors or caps.
We believe that substantially all of our food and supplies are available from several sources, which helps to diversify our overall commodity cost risk. We also believe that we have some flexibility and ability to increase certain menu prices, or vary certain menu items offered or promoted, in response to food commodity price increases.
Removed
However, it may not be possible for us to enter into fixed-price contracts for certain commodities or we may choose not to enter into fixed-price contracts for certain commodities. We believe that substantially all of our food and supplies are available from several sources, which helps to diversify our overall commodity cost risk.

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