BJ’s Restaurants, Inc. — FY2022 Form 10-K
Reporting period: The filing covers the fiscal year ended January 3, 2023 (FY2022), not 2020 Q4 as indicated in the request metadata. FY2022 had 53 weeks, versus 52 weeks in FY2021. BJ’s operated 216 company-owned restaurants at year-end and reported one operating segment.
Financial performance
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $1,283.9 million | $1,087.0 million |
| Comparable restaurant sales | +14.0% on a 53-week basis | — |
| Operating income (loss) | ($5.5) million; (0.4)% margin | ($16.5) million; (1.5)% margin |
| Net income (loss) | $4.1 million; $0.17 diluted EPS | ($3.6) million; ($0.16) diluted EPS |
| Adjusted EBITDA | $77.9 million; 6.1% of revenue | $70.5 million; 6.5% of revenue |
| Restaurant-level operating margin | $144.8 million; 11.3% | $129.6 million; 11.9% |
| Cash from operations | $51.1 million | $64.3 million |
Revenue grew 18.1%, including $26.5 million attributed to the additional fiscal week. Comparable sales rose with estimated guest traffic up 9.3% and average check up 4.7%; the latter reflected menu pricing and mix. Average check was approximately $20, versus $19. Cost of sales rose to 27.2% of revenue from 26.5%, and labor and benefits to 37.6% from 36.9%, primarily reflecting inflation, wages, training and operating conditions. Occupancy and operating costs declined as a share of revenue, to 23.8% from 24.6%.
Net income included a $12.4 million income tax benefit, with FICA tip tax credits a significant factor. Despite the return to net profitability, the company reported an operating loss. Adjusted EBITDA and restaurant-level margin are company-defined non-GAAP measures.
Liquidity, debt and capital spending
- Cash and cash equivalents were $24.9 million, down from $38.5 million. Net working capital was negative $114.6 million and the current ratio was 0.4:1.0.
- Net cash used in investing was $71.9 million; capital expenditures were $78.6 million, including $43.8 million for new restaurants. Operating cash flow less capital expenditures was approximately negative $27.5 million.
- Long-term debt was $60.0 million, compared with $50.0 million a year earlier. The $215 million revolving credit facility had $138.8 million available after borrowings and letters of credit; it matures November 3, 2026. The company was in covenant compliance at year-end. Borrowings bear floating interest rates.
- Operating lease obligations had a reported present value of $472.7 million. Contractual operating lease payments total $597.3 million; these are distinct from funded debt.
- Quarterly cash dividends remained suspended. FY2022 share repurchases totaled $2.4 million, with approximately $22.1 million remaining under the repurchase authorization.
Outlook, risks and unusual items
Management planned to open as many as five restaurants in FY2023 and forecast approximately $90–$95 million of capital expenditures, including remodels of more than 30 locations. It expected marketing spending of 1.5%–2.0% of revenue. Management said current cash, operating cash flow and credit availability should meet capital and working-capital needs for at least 12 months, while noting uncertainty in the macroeconomic environment.
Principal risks include persistent food, labor, construction and utility inflation; difficulty passing costs through menu pricing without affecting traffic; labor availability and wage pressure; supply-chain and commodity disruption; competition and discretionary-spending sensitivity; and weather, regulatory, food-safety, cybersecurity and lease-related risks. Management noted that inflation had materially affected operations and new restaurant costs.
FY2022 included six restaurant openings and two closures, a net $3.3 million gain on a land sale/lease transaction, and a $4.9 million gain associated with contributing internally developed software for a 20% equity-method investment. The filing reports $6.2 million of net disposal and impairment losses in the operating statement; the notes separately describe a $9.3 million impairment charge before other items. Long-lived asset impairment evaluation was identified as a critical audit matter. KPMG issued unqualified opinions on the financial statements and internal control over financial reporting.
Investor verification points
- Separate underlying sales and earnings trends from the extra fiscal week and the large year-over-year recovery in comparable sales.
- Assess whether pricing can offset inflation without weakening guest traffic, and track food, labor and restaurant-level margin trends.
- Review operating cash flow against planned $90–$95 million FY2023 capital spending, liquidity and revolving-credit availability.
- Reconcile the tax-credit benefit and the reported impairment and software/land-sale gains when evaluating recurring profitability.
- Monitor lease commitments, floating-rate debt, covenant headroom, restaurant returns and execution of the expansion and remodeling plan.