BJs RESTAURANTS INC

Previous wording

Certain information included in this Form 10-Q and other filings with the Securities and Exchange Commission, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers may contain “forward-looking” statements about our current and expected performance trends, growth plans, business goals and other matters. Words or phrases such as “believe,” “plan,” “will likely result,” “expect,” “intend,” “will continue,” “is anticipated,” “estimate,” “project,” “may,” “could,” “would,” “should,” and similar expressions are intended to identify “forward-looking” statements. These statements, and any other statements that are not historical facts, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended from time to time. The cautionary statements made in this Form 10-Q should be read as being applicable to all related “forward-looking” statements wherever they appear in this Form 10-Q. These forward-looking statements are based on information available to us as of the date any such statements are made, and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the risk factors described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 2, 2024, as updated in our Form 10-Q for the twenty-six weeks ended July 2, 2024, and in other reports filed subsequently with the SEC.

Current wording

Certain information included in this Form 10-Q and other filings with the Securities and Exchange Commission, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers may contain “forward-looking” statements about our current and expected performance trends, growth plans, business goals and other matters. Words or phrases such as “believe,” “plan,” “will likely result,” “expect,” “intend,” “will continue,” “is anticipated,” “estimate,” “project,” “may,” “could,” “would,” “should,” and similar expressions are intended to identify “forward-looking” statements. These statements, and any other statements that are not historical facts, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended from time to time. The cautionary statements made in this Form 10-Q should be read as being applicable to all related “forward-looking” statements wherever they appear in this Form 10-Q. These forward-looking statements are based on information available to us as of the date any such statements are made, and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the risk factors described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 2, 2024, as updated in our Form 10-Q for the thirty-nine weeks ended October 1, 2024, and in other reports filed subsequently with the SEC.

Previous wording

BJ’s Restaurants is a leading casual dining restaurant brand differentiated by a high-quality, varied menu with compelling value, and a dining experience that offers our customers (referred to as “guests”) best-in-class service, hospitality and enjoyment, in a high-energy, welcoming and approachable atmosphere. As of August 5, 2024, BJ's owns and operates 216 restaurants located in 31 states.

Current wording

BJ’s Restaurants is a leading casual dining restaurant brand differentiated by a high-quality, varied menu with compelling value, and a dining experience that offers our customers (referred to as “guests”) best-in-class service, hospitality and enjoyment, in a high-energy, welcoming and approachable atmosphere. As of November 4, 2024, BJ's owns and operates 218 restaurants located in 31 states.

Previous wording

Our revenues are comprised of food and beverage sales from our restaurants, including takeout, delivery and catering sales. 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. Gift card sales are recorded as a liability and recognized as revenues upon redemption in our restaurants. Based on historical redemption rates, a portion of our gift card sales are not expected to be redeemed and will be recognized as gift card “breakage.” Estimated gift card breakage is recorded as revenue and recognized in proportion to our historical redemption pattern, unless there is a legal obligation to remit the unredeemed gift cards to government authorities.

Current wording

Our revenues are comprised of food and beverage sales from our restaurants, including takeout, delivery and catering sales. 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. Gift card sales are recorded as a liability and recognized as revenues upon redemption in our restaurants. A portion of our gift card sales are not expected to be redeemed and will be recognized as gift card “breakage.” Estimated gift card breakage is recorded as revenue and recognized in proportion to our historical redemption pattern, unless there is a legal obligation to remit the unredeemed gift cards to government authorities.

Previous wording

The following table provides, for the periods indicated, our unaudited Consolidated Statements of Operations expressed as percentages of total revenues. The results of operations for the thirteen and twenty-six weeks ended July 2, 2024 and July 4, 2023, are not necessarily indicative of the results to be expected for the full fiscal year. Percentages below may not reconcile due to rounding.

Current wording

The following table provides, for the periods indicated, our unaudited Consolidated Statements of Operations expressed as percentages of total revenues. The results of operations for the thirteen and thirty-nine weeks ended October 1, 2024 and October 3, 2023, are not necessarily indicative of the results to be expected for the full fiscal year. Percentages below may not reconcile due to rounding.

Previous wording

Revenues. Total revenues increased by $0.3 million, or 0.1%, to $349.9 million during the thirteen weeks ended July 2, 2024, from $349.7 million during the comparable thirteen-week period of 2023. The increase in revenues consisted of a $6.0 million increase related to sales from new restaurants not yet in our comparable restaurant sales base, offset by a 0.6%, or $2.0 million, decline in comparable restaurant sales, and a $3.3 million decrease related to closed restaurants. The decrease in comparable restaurant sales was due to a decrease in guest traffic of approximately 3.0%, offset by an increase in average check of approximately 2.4%, resulting from menu price increases and changes in mix.

Current wording

Revenues. Total revenues increased by $7.1 million, or 2.2%, to $325.7 million during the thirteen weeks ended October 1, 2024, from $318.6 million during the comparable thirteen-week period of 2023. The increase in revenues primarily consisted of a 1.7%, or $5.2 million, increase in comparable restaurant sales, and $5.4 million related to sales from new restaurants not yet in our comparable restaurant sales base. This increase was offset by a $2.7 million decrease related to closed restaurants and $0.7 million primarily related to gift card breakage and loyalty redemptions. The increase in comparable restaurant sales was due to an increase in guest traffic of approximately 1.3%, coupled with an increase in average check of approximately 0.4%, resulting from menu price increases, changes in mix and a higher level of promotions.

Previous wording

Labor and Benefits. Labor and benefit costs for our restaurants decreased by $0.2 million, or 0.2%, to $126.3 million during the thirteen weeks ended July 2, 2024, from $126.5 million during the comparable thirteen-week period of 2023. This was primarily due to $0.2 million related to lower hourly labor and $0.4 million related to lower management compensation costs, offset by $0.2 million increase in taxes and benefits, $0.1 million in higher stock-based compensation expense, and $0.1 million related to higher workers’ compensation costs. As a percentage of revenues, labor and benefit costs decreased to 36.1% for the current thirteen-week period from 36.2% for the prior year comparable period. This decrease was primarily due improved labor efficiency and the effectiveness of our cost savings initiatives. Included in labor and benefits for the thirteen weeks ended July 2, 2024 and July 4, 2023, was approximately $0.5 million and $0.4 million, or 0.2% and 0.1%, 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.

Current wording

Labor and Benefits. Labor and benefit costs for our restaurants increased by $2.5 million, or 2.1%, to $120.7 million during the thirteen weeks ended October 1, 2024, from $118.2 million during the comparable thirteen-week period of 2023. This was primarily due to $1.5 million related to higher management compensation, $0.9 million related to higher hourly labor, $0.8 million in taxes and benefits, and $0.1 million in higher stock-based compensation expense, offset by $0.9 million related to lower workers’ compensation costs. As a percentage of revenues, labor and benefit costs remained consistent at 37.1% for the current thirteen-week period and the prior year comparable period. Included in labor and benefits for the thirteen weeks ended October 1, 2024 and October 3, 2023, was approximately $0.7 million and $0.6 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.

Previous wording

Occupancy and Operating. Occupancy and operating expenses decreased by $2.3 million, or 2.9%, to $79.6 million during the thirteen weeks ended July 2, 2024, from $81.9 million during the comparable thirteen-week period of 2023. This was primarily due to decreases of $1.8 million in restaurant facility expenses, $0.6 million in marketing-related expenses, and $0.3 million in kitchen and dining supplies, offset by increases of $0.1 million in delivery-related fees and expenses, and $0.3 million in credit card processing fees. As a percentage of revenues, occupancy and operating expenses decreased to 22.7% for the current thirteen-week period from

Current wording

Occupancy and Operating. Occupancy and operating expenses increased by $0.3 million, or 0.4%, to $80.3 million during the thirteen weeks ended October 1, 2024, from $80.0 million during the comparable thirteen-week period of 2023. This was primarily due to increases of $1.2 million in marketing-related expenses, offset by decreases of $0.9 million in restaurant facility expenses. As a percentage of revenues, occupancy and operating expenses decreased to 24.7% for the current thirteen-week period from 25.1% for the prior year comparable period. This decrease was primarily related to improved operational efficiency and the effectiveness of our cost savings initiatives, coupled with a higher revenue base.

Previous wording

General and Administrative. General and administrative expenses decreased by $0.6 million, or 2.8%, to $20.6 million during the thirteen weeks ended July 2, 2024, from $21.2 million during the comparable thirteen-week period of 2023. This was primarily due to decreases of $0.5 million in consulting fees, $0.5 million related to our deferred compensation liability, and $0.3 million in corporate expenses, offset by increases of $0.5 million in legal fees, $0.2 million in office expenses, and $0.1 million related to travel and lodging. General and administrative expenses during the thirteen weeks ended July 2, 2024 included $0.6 million of legal costs related to shareholder cooperation agreements and related matters. As a percentage of revenues, general and administrative expenses decreased to 5.9% for the current thirteen-week period from 6.1% for the prior year comparable period. This decrease was primarily due to our ability to leverage our fixed costs. Included in general and administrative costs for the thirteen weeks ended July 2, 2024 and July 4, 2023, was approximately $2.2 million and $2.4 million, or 0.6% and 0.7% of revenues, respectively, of stock-based compensation expense

Current wording

General and Administrative. General and administrative expenses increased by $1.5 million, or 7.6%, to $21.0 million during the thirteen weeks ended October 1, 2024, from $19.5 million during the comparable thirteen-week period of 2023. This was primarily due to increases of $1.7 million in personnel related costs, $0.8 million related to our deferred compensation liability, $0.4 million in legal fees, $0.3 million in office expenses, and $0.3 million in recruiting related expenses, offset by lower stock-based compensation of $1.9 million, and incentive compensation of $0.4 million. General and administrative expenses during the thirteen weeks ended October 1, 2024 included a net charge of $1.7 million related to our leadership transition and severance, relocation and signing bonus expenses, offset by a $2.1 million stock-based compensation credit related to the reversal of previously awarded stock-based compensation expense in conjunction with our leadership transition. As a percentage of revenues, general and administrative expenses increased to 6.4% for the current thirteen-week period from 6.1% for the prior year comparable period. This increase is primarily related to increased deferred compensation liability and personnel costs, coupled with legal and recruiting fees, offset by lower stock-based compensation expense related to our leadership transition. Included in general and administrative costs was stock-based compensation expense of approximately $0.2 million and $2.1 million, or 0.1% and 0.7% of revenues for the thirteen weeks ended October 1, 2024 and October 3, 2023, respectively.

Previous wording

Depreciation and Amortization. Depreciation and amortization increased by $0.5 million, or 2.6%, to $18.2 million during the thirteen weeks ended July 2, 2024, compared to $17.7 million during the comparable thirteen-week period of 2023. This increase was primarily related to depreciation expense related to our restaurants opened since the thirteen weeks ended July 4, 2023, coupled with depreciation related to our remodeled restaurants, partially offset by the impact of impairment and disposal charges taken in the prior year, and the closure of four restaurants since the thirteen weeks ended July 4, 2023. As a percentage of revenues, depreciation and amortization increased to 5.2% for the current thirteen-week period from 5.1% for the prior year comparable period. This increase was primarily due to a greater increase in depreciation and amortization than the increase in our revenue base.

Current wording

Depreciation and Amortization. Depreciation and amortization increased by $0.3 million, or 1.8%, to $18.2 million during the thirteen weeks ended October 1, 2024, compared to $17.9 million during the comparable thirteen-week period of 2023. This increase was primarily related to depreciation expense related to our restaurants opened since the thirteen weeks ended October 3, 2023, coupled with depreciation related to our remodeled restaurants, partially offset by the impact of impairment and disposal charges taken in the prior year, and the closure of two restaurants since the thirteen weeks ended October 3, 2023. As a percentage of revenues, depreciation and amortization remained consistent at 5.6% for the current thirteen-week period and the prior year comparable period.

Previous wording

Restaurant Opening. Restaurant opening expense decreased by $0.1 million, or 20.6%, to $0.3 million during the thirteen weeks ended July 2, 2024, compared to $0.4 million during the comparable thirteen-week period of 2023. This decrease was primarily due to the timing of openings.

Current wording

Restaurant Opening. Restaurant opening expense decreased by $0.3 million, or 19.1%, to $1.1 million during the thirteen weeks ended October 1, 2024, compared to $1.4 million during the comparable thirteen-week period of 2023. This decrease was primarily due to the timing of openings.

Previous wording

Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $1.9 million during the thirteen weeks ended July 2, 2024, and $1.1 million during the comparable thirteen-week period of 2023. For the thirteen weeks ended July 2, 2024, the cost primarily related to the impairment and reduction in the carrying value of the long-lived assets related to one of our restaurants. For the thirteen weeks ended July 4, 2023, these costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date.

Current wording

Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $0.3 million during the thirteen weeks ended October 1, 2024, and $1.4 million during the comparable thirteen-week period of 2023. For the thirteen weeks ended October 1, 2024, the costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date. For the thirteen weeks ended October 3, 2023, the costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date as well as the closure of an under-performing restaurant in the quarter.

Previous wording

Interest Expense, Net. Interest expense, net, increased by $0.2 million to $1.3 million during the thirteen weeks ended July 2, 2024, compared to $1.1 million during the comparable thirteen-week period of 2023. This increase was primarily due to the increase in weighted average interest rate year over year, coupled with a higher average outstanding debt balance.

Current wording

Interest Expense, Net. Interest expense, net, increased by $0.3 million to $1.3 million during the thirteen weeks ended October 1, 2024, compared to $1.0 million during the comparable thirteen-week period of 2023. This increase was primarily due to the increase in weighted average interest rate year over year, coupled with a higher average outstanding debt balance.

Previous wording

Other Income, Net. Other income, net, increased by $2.2 million to $2.8 million of income during the thirteen weeks ended July 2, 2024, compared to $0.6 million during the comparable thirteen-week period of 2023. This increase was primarily related to a payroll tax credit, offset by losses associated with the cash surrender value of certain life insurance policies under our deferred compensation plan.

Current wording

Other Income, Net. Other income, net, increased to $0.8 million of income during the thirteen weeks ended October 1, 2024. This increase was primarily related to gains associated with the cash surrender value of certain life insurance policies under our deferred compensation plan.

Previous wording

Income Tax Benefit. Our effective income tax rate for the thirteen weeks ended July 2, 2024, was a benefit of 16.4% compared to a benefit of 22.7% for the comparable thirteen-week period of 2023. The effective tax rate for the thirteen weeks ended July 2, 2024 and July 4, 2023 was different than the statutory rate primarily due to FICA tax tip credits.

Current wording

Income Tax Benefit. Our effective income tax rate for the thirteen weeks ended October 1, 2024, was a benefit of 8.2% compared to an expense of 11.8% for the comparable thirteen-week period of 2023. The effective tax rate for the thirteen weeks ended October 1, 2024 and October 3, 2023 was different than the statutory rate primarily due to FICA tax tip credits.

Previous wording

Revenues. Total revenues decreased by $3.7 million, or 0.5%, to $687.3 million during the twenty-six weeks ended July 2, 2024, from $691.0 million during the comparable twenty-six-week period of 2023. The decrease in revenues primarily consisted of a 1.1%, or $7.6 million, decline in comparable restaurant sales, and a $8.5 million decrease related to closed restaurants, offset by a $13.1 million increase related to sales from new restaurants not yet in our comparable restaurant sales base. The decrease in comparable restaurant sales was due to a decrease in guest traffic of approximately 4.4%, offset by an increase in average check of approximately 3.3%, resulting from menu price increases and changes in mix.

Current wording

Revenues. Total revenues increased by $3.4 million, or 0.3%, to $1.0 billion during the thirty-nine weeks ended October 1, 2024. The increase in revenues primarily consisted of an $18.5 million increase related to sales from new restaurants not yet in our comparable restaurant sales base, offset by a 0.2%, or $2.4 million, decline in comparable restaurant sales, an $11.2 million decrease related to closed restaurants, and $1.5 million primarily related to gift card breakage and loyalty redemptions. The decrease in comparable restaurant sales was due to a decrease in guest traffic of approximately 2.5%, offset by an increase in average check of approximately 2.3%, resulting from menu price increases and changes in mix.

Previous wording

Cost of Sales. Cost of sales decreased by $0.8 million, or 0.9%, to $89.8 million during the thirteen weeks ended July 2, 2024, from $90.6 million during the comparable thirteen-week period of 2023. This was primarily due to lower commodity costs and the effects of our cost savings initiatives. As a percentage of revenues, cost of sales decreased to 25.7% for the current thirteen-week period from 25.9% for the prior year comparable period. This decrease was primarily due to lower inflationary pressure on food costs, menu price increases and the effectiveness of our cost savings initiatives.

Current wording

Cost of Sales. Cost of sales decreased by $2.7 million, or 1.0%, to $261.5 million during the thirty-nine weeks ended October 1, 2024, from $264.1 million during the comparable thirty-nine-week period of 2023. This was primarily due to the effects of our cost savings initiatives, partially offset by higher commodity costs and a higher level of promotions. As a percentage of revenues, cost of sales decreased to 25.8% for the current thirty-nine-week period from 26.2% for the prior year comparable period. This decrease was primarily due to a higher revenue base, menu price increases and the effectiveness of our cost savings initiative, partially offset by higher commodity costs and a higher level of promotions.

Previous wording

Labor and Benefits. Labor and benefit costs for our restaurants decreased by $3.5 million, or 1.4%, to $251.3 million during the twenty-six weeks ended July 2, 2024, from $254.9 million during the comparable twenty-six-week period of 2023. This was primarily due to $3.2 million related to lower hourly labor, $0.6 million related to lower workers’ compensation, and $0.2 million in lower stock-based compensation expense, offset by $0.6 million related to increased management compensation costs. As a percentage of revenues, labor and benefit costs decreased to 36.6% for the current twenty-six-week period from 36.9% for the prior year comparable period. This decrease was primarily due to improved labor efficiency and the effectiveness of our cost savings initiatives. Included in labor and benefits for the twenty-six weeks ended July 2, 2024 and July 4, 2023, was approximately $1.0 million and $1.3 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.

Current wording

Labor and Benefits. Labor and benefit costs for our restaurants decreased by $1.0 million, or 0.3%, to $372.0 million during the thirty-nine weeks ended October 1, 2024, from $373.1 million during the comparable thirty-nine-week period of 2023. This was primarily due to $2.3 million related to lower hourly labor and $1.5 million related to lower workers’ compensation, offset by $2.1 million related to increased management compensation costs and $0.7 million related to taxes and benefits. As a percentage of revenues, labor and benefit costs decreased to 36.7% for the current thirty-nine-week period from 37.0% for the prior year comparable period. This decrease was primarily due to improved labor efficiency and the effectiveness of our cost savings initiatives. Included in labor and benefits for the thirty-nine weeks ended October 1, 2024 and October 3, 2023, was approximately $1.8 million and $1.9 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.

Previous wording

Occupancy and Operating. Occupancy and operating expenses decreased by $4.6 million, or 2.9%, to $156.4 million during the twenty-six weeks ended July 2, 2024, from $161.1 million during the comparable twenty-six-week period of 2023. This was primarily due to decreases of $3.2 million in restaurant facilities expenses, $1.7 million related to other operating expenses, $0.6 million in utilities, and $0.4 million in delivery-related fees and expenses, offset by a $0.7 million increase in credit card processing fees. As a percentage of revenues, occupancy and operating expenses decreased to 22.8% for the current twenty-six-week period from 23.3% for the prior year comparable period. This decrease was primarily related to improved operational efficiency and the effectiveness of our cost savings initiatives.

Current wording

Occupancy and Operating. Occupancy and operating expenses decreased by $4.3 million, or 1.8%, to $236.7 million during the thirty-nine weeks ended October 1, 2024, from $241.1 million during the comparable thirty-nine-week period of 2023. This was primarily due to decreases of $4.1 million in restaurant facilities expenses, $1.0 million related to equipment rental, $0.9 million in utilities, and $0.3 million in delivery-related fees and expenses, offset by a $1.0 million increase in credit card processing fees and $1.3 million in marketing expenditures. As a percentage of revenues, occupancy and operating expenses decreased to 23.4% for the current thirty-nine-week period from 23.9% for the prior year comparable period. This decrease was primarily related to improved operational efficiency and the effectiveness of our cost savings initiatives.

Previous wording

General and Administrative. General and administrative expenses increased by $2.7 million, or 6.6%, to $43.6 million during the twenty-six weeks ended July 2, 2024, from $40.9 million during the comparable twenty-six-week period of 2023. This was primarily due to increases of $1.7 million in legal fees, $1.0 million in corporate expenses related to meeting costs and software amortization, and $0.3 million in travel and lodging, offset by a $0.3 million decrease in incentive compensation. General and administrative costs for the twenty-six weeks ended July 2, 2024 included $1.5 million of legal costs related to shareholder cooperation agreements and related matters, and $0.3 million in severance related to personnel changes. As a percentage of revenues, general and administrative expenses increased to 6.3% for the current twenty-six-week period from 5.9% for the prior year comparable period. This increase was primarily related to increased legal and corporate expenses arising in connection with our previously announced cooperation agreements and related matters with certain investors, coupled with the deleveraging from a lower revenue base. Included in general and administrative costs for the twenty-six weeks ended July 2, 2024 and July 4, 2023, was approximately $4.2 million and $4.1 million, respectively, or 0.6% of revenues of stock-based compensation expense.

Current wording

General and Administrative. General and administrative expenses increased by $4.2 million, or 6.9%, to $64.6 million during the thirty-nine weeks ended October 1, 2024, from $60.4 million during the comparable thirty-nine-week period of 2023. This was primarily due to increases of $2.1 million in legal fees, $1.9 million in personnel related costs, $1.1 million in corporate expenses related to meeting costs and software amortization, $0.9 million related to our deferred compensation liability, $0.2 million in travel related expenses, and $0.2 million related to recruiting, offset by lower stock-based compensation expense of $1.8 million, and a $0.8 million decrease in incentive compensation. General and administrative costs for the thirty-nine weeks ended October 1, 2024 included a net charge of $1.7 million related to our leadership transition and severance, relocation and signing bonus expenses, $1.5 million of legal costs related to shareholder cooperation agreements and related matters, and $0.3 million in severance related to personnel changes, offset by a $2.1 million stock-based compensation credit related to the reversal of previously awarded stock-based compensation expense in conjunction with our leadership transition. As a percentage of revenues, general and administrative expenses increased to 6.4% for the current thirty-nine-week period from 6.0% for the prior year comparable period. This increase was primarily related to increased legal and corporate expenses arising in connection with our previously announced cooperation agreements and related matters with certain investors. Included in general and administrative costs was stock-based compensation expense of approximately $4.4 million and $6.2 million, or 0.4% and 0.6% of revenues for the thirty-nine weeks ended October 1, 2024 and October 3, 2023, respectively.

Previous wording

Depreciation and Amortization. Depreciation and amortization increased by $0.7 million, or 2.0%, to $36.0 million during the twenty-six weeks ended July 2, 2024, compared to $35.3 million during the comparable twenty-six-week period of 2023. This increase was primarily related to depreciation expense related to our restaurants opened since the twenty-six weeks ended July 4, 2023, partially offset by the impact of impairment and disposal charges taken in the prior year, and the closure of four restaurants since the twenty-six weeks ended July 4, 2023. As a percentage of revenues, depreciation and amortization increased to 5.2% for the current twenty-six-week period from 5.1% for the prior year comparable period. This increase was primarily due to increased depreciation expense coupled with a lower revenue base.

Current wording

Depreciation and Amortization. Depreciation and amortization increased by $1.0 million, or 1.9%, to $54.2 million during the thirty-nine weeks ended October 1, 2024, compared to $53.2 million during the comparable thirty-nine-week period of 2023. This increase was primarily related to depreciation expense related to our restaurants opened since the thirty-nine weeks ended October 3, 2023, partially offset by the impact of impairment and disposal charges taken in the prior year, and the closure of two restaurants since the thirty-nine weeks ended October 3, 2023. As a percentage of revenues, depreciation and amortization increased to 5.4% for the current thirty-nine-week period from 5.3% for the prior year comparable period. This increase was primarily due to increased depreciation expense.

Previous wording

Restaurant Opening. Restaurant opening expense decreased by $0.3 million, or 27.2%, to $0.9 million during the twenty-six weeks ended July 2, 2024, compared to $1.2 million during the comparable twenty-six-week period of 2023. This decrease was primarily due to the timing of openings.

Current wording

Restaurant Opening. Restaurant opening expense decreased by $0.6 million, or 22.9%, to $2.0 million during the thirty-nine weeks ended October 1, 2024, compared to $2.6 million during the comparable thirty-nine-week period of 2023. This decrease was primarily due to the timing of openings.

Previous wording

Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $2.7 million during the twenty-six weeks ended July 2, 2024, and $3.3 million during the comparable twenty-six-week period of 2023. For the twenty-six weeks ended July 2, 2024, the cost primarily related to the impairment and reduction in the carrying value of the long-lived assets related to one of our restaurants, coupled with the disposals of assets in conjunction with initiatives to keep our restaurants up to date. For the twenty-six weeks ended July 4, 2023, these costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date, including the removal of glass partitions in our dining rooms that were installed early in the pandemic.

Current wording

Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $3.0 million during the thirty-nine weeks ended October 1, 2024, and $4.7 million during the comparable thirty-nine-week period of 2023. For the thirty-nine weeks ended October 1, 2024, the cost primarily related to the impairment and reduction in the carrying value of the long-lived assets related to one of our restaurants, coupled with the disposals of assets in conjunction with initiatives to keep our restaurants up to date. For the thirty-nine weeks ended October 3, 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 four under-performing restaurants.

Previous wording

Interest Expense, Net. Interest expense, net, increased by $0.4 million to $2.7 million during the twenty-six weeks ended July 2, 2024, compared to $2.2 million during the comparable twenty-six-week period of 2023. This increase was primarily due to the increase in weighted average interest rate year over year, coupled with a higher average outstanding debt balance.

Current wording

Interest Expense, Net. Interest expense, net, increased by $0.8 million to $4.0 million during the thirty-nine weeks ended October 1, 2024, compared to $3.2 million during the comparable thirty-nine-week period of 2023. This increase was primarily due to the increase in weighted average interest rate year over year, coupled with a higher average outstanding debt balance.

Previous wording

Other Income, Net. Other income, net, increased by $2.7 million to $3.5 million of income during the twenty-six weeks ended July 2, 2024, compared to $0.8 million during the comparable twenty-six-week period of 2023. This increase was primarily related to a payroll tax credit.

Current wording

Other Income, Net. Other income, net, increased by $3.4 million to $4.2 million of income during the thirty-nine weeks ended October 1, 2024, compared to $0.8 million during the comparable thirty-nine-week period of 2023. This increase was primarily related to a payroll tax credit.

Previous wording

Income Tax Benefit. Our effective income tax rate for the twenty-six weeks ended July 2, 2024, was a benefit of 11.7% compared to a benefit of 35.0% for the comparable twenty-six-week period of 2023. The effective tax rate for the twenty-six weeks ended July 2, 2024 and July 4, 2023, was different than the statutory rate primarily due to FICA tax tip credits.

Current wording

Income Tax Benefit. Our effective income tax rate for the thirty-nine weeks ended October 1, 2024, was a benefit of 15.0% compared to a benefit of 44.9% for the comparable thirty-nine-week period of 2023. The effective tax rate for the thirty-nine weeks ended October 1, 2024 and October 3, 2023, was different than the statutory rate primarily due to FICA tax tip credits.

Previous wording

Net cash provided by operating activities was $42.5 million during the twenty-six weeks ended July 2, 2024, representing a $0.9 million increase from the $41.6 million provided during the twenty-six weeks ended July 4, 2023. The increase is primarily due to improved net income coupled with the timing of accounts receivable receipts, offset by the timing of accounts payable and accrued expense payments.

Current wording

Net cash provided by operating activities was $69.8 million during the thirty-nine weeks ended October 1, 2024, representing a $3.8 million decrease from the $73.6 million provided during the thirty-nine weeks ended October 3, 2023. The decrease over prior year is primarily due to the timing of accounts receivable receipts coupled with the timing of accounts payable and accrued expense payments, offset by improved net income.

Previous wording

Net cash used in investing activities was $41.3 million during the twenty-six weeks ended July 2, 2024, representing a $11.6 million decrease from the $52.9 million used during the twenty-six weeks ended July 4, 2023. The decrease is primarily due to the timing of restaurants under construction, as well as the timing of restaurant remodel activity.

Current wording

Net cash used in investing activities was $61.0 million during the thirty-nine weeks ended October 1, 2024, representing a $20.9 million decrease from the $82.0 million used during the thirty-nine weeks ended October 3, 2023. The decrease over prior year is primarily due to the number of new restaurant openings coupled with the timing of restaurant remodel activity.

Previous wording

We currently anticipate our total capital expenditures for fiscal 2024 to be approximately $70 million to $75 million. 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. Our future cash requirements will depend on many factors, including the pace of our expansion, conditions in the retail property development market, construction costs, the nature of the specific sites selected for new restaurants, and the nature of the specific leases and associated tenant improvement allowances available, if any, as negotiated with landlords.

Current wording

As of November 4, 2024, we have opened three new restaurants and closed one restaurant this year. We currently anticipate our total capital expenditures for fiscal 2024 to be approximately $75 million. 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. Our future cash requirements will depend on many factors, including the pace of our expansion, conditions in the retail property development market, construction costs, the nature of the specific sites selected for new restaurants, and the nature of the specific leases and associated tenant improvement allowances available, if any, as negotiated with landlords.

Previous wording

Net cash used in financing activities was $14.1 million during the twenty-six weeks ended July 2, 2024, representing a $6.6 million increase from the $7.5 million used during the twenty-six weeks ended July 4, 2023. This increase was primarily due to payments on our line of credit during the twenty-six weeks ended July 2, 2024.

Current wording

Net cash used in financing activities was $19.5 million during the thirty-nine weeks ended October 1, 2024, representing a $14.9 million increase from the $4.6 million used during the thirty-nine weeks ended October 3, 2023. The increase over prior year is primarily due to an increase in shares repurchased.

Previous wording

A summary of our other critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended January 2, 2024. During the twenty-six weeks ended July 2, 2024, there were no significant changes in our critical accounting policies.

Current wording

A summary of our other critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended January 2, 2024. During the thirty-nine weeks ended October 1, 2024, there were no significant changes in our critical accounting policies.