RRGB » Topics » 5. Goodwill and Intangible Assets

This excerpt taken from the RRGB 10-K filed Feb 26, 2009.

6. Goodwill and Intangible Assets

        The following table presents goodwill as of December 28, 2008 and December 30, 2007 (in thousands).

 
  2008   2007  

Balance at beginning of year

  $ 56,299   $ 43,496  

Acquisitions (See Note 3)

    4,683     12,803  
           

Balance at end of year

  $ 60,982   $ 56,299  
           

        The following table presents intangible assets subject to amortization as of December 28, 2008 and December 30, 2007 (in thousands):

 
  2008   2007  
 
  Gross
Carrying
Amount
  Accumulated
Amortization
  Net
Carrying
Amount
  Gross
Carrying
Amount
  Accumulated
Amortization
  Net
Carrying
Amount
 

Intangible assets subject to amortization:

                                     

Franchise rights

  $ 44,099   $ (6,940 ) $ 37,159   $ 33,718   $ (4,656 ) $ 29,062  

Leasehold interests

    13,034     (1,361 )   11,673     10,590     (664 )   9,926  

Liquor licenses

    6,887     (3,729 )   3,158     4,876     (2,805 )   2,071  
                           

  $ 64,020   $ (12,030 ) $ 51,990   $ 49,184   $ (8,125 ) $ 41,059  
                           

        In 2008, the Company recognized an impairment to its intangible assets subject to amortization relating to the restaurant impairment discussed in Note 4, Restaurant Impairment and Planned Closures. The impairment charge reduced the gross carrying amount of total intangibles by $848,000 and total accumulated amortization by $243,000. The aggregate amortization expense related to intangible assets

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Table of Contents


RED ROBIN GOURMET BURGERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Goodwill and Intangible Assets (Continued)


subject to amortization for 2008 and 2007 was $4.1 million and $2.9 million, respectively. The estimated aggregate amortization expense for the years ended December 27, 2009, December 26, 2010, December 25, 2011, December 30, 2012 and December 29, 2013 is $4.5 million, $3.9 million, $3.8 million, $3.6 million and $3.3 million, respectively.

These excerpts taken from the RRGB 10-K filed Feb 28, 2008.

5. Goodwill and Intangible Assets

        The following table presents goodwill as of December 30, 2007 and December 31, 2006 (in thousands).

 
  2007
  2006
Balance at beginning of year   $ 43,496   $ 25,720
Acquisitions (See Note 3)     12,803     17,776
   
 
Balance at end of year   $ 56,299   $ 43,496
   
 

        The following table presents intangible assets subject to amortization as of December 30, 2007 and December 31, 2006 (in thousands):

 
  2007
  2006
 
  Gross
Carrying
Amount

  Accumulated
Amortization

  Net
Carrying
Amount

  Gross
Carrying
Amount

  Accumulated
Amortization

  Net
Carrying
Amount

Intangible assets subject to amortization:                                    
Franchise rights   $ 33,718   $ (4,656 ) $ 29,062   $ 18,766   $ (2,947 ) $ 15,819
Leasehold interests     10,590     (664 )   9,926     5,763     (125 )   5,638
Liquor licenses     4,876     (2,805 )   2,071     3,445     (2,130 )   1,315
   
 
 
 
 
 
    $ 49,184   $ (8,125 ) $ 41,059   $ 27,974   $ (5,202 ) $ 22,772
   
 
 
 
 
 

        The aggregate amortization expense related to intangible assets subject to amortization for 2007 was $2.9 million. The estimated aggregate amortization expense for the years ended December 28, 2008, December 27, 2009, December 26, 2010, December 25, 2011 and December 30, 2012 is $3.5 million, $3.3 million, $3.2 million, $3.1 million and $2.8 million, respectively.

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RED ROBIN GOURMET BURGERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Goodwill and Intangible Assets



        The following table presents goodwill as of December 30, 2007 and December 31, 2006 (in thousands).





















































 
 2007
 2006
Balance at beginning of year $43,496 $25,720
Acquisitions (See Note 3)  12,803  17,776
  
 
Balance at end of year $56,299 $43,496
  
 




        The
following table presents intangible assets subject to amortization as of December 30, 2007 and December 31, 2006 (in thousands):


































































































































































 
 2007
 2006
 
 Gross

Carrying

Amount

 Accumulated

Amortization

 Net

Carrying

Amount

 Gross

Carrying

Amount

 Accumulated

Amortization

 Net

Carrying

Amount

Intangible assets subject to amortization:                  
Franchise rights $33,718 $(4,656)$29,062 $18,766 $(2,947)$15,819
Leasehold interests  10,590  (664) 9,926  5,763  (125) 5,638
Liquor licenses  4,876  (2,805) 2,071  3,445  (2,130) 1,315
  
 
 
 
 
 
  $49,184 $(8,125)$41,059 $27,974 $(5,202)$22,772
  
 
 
 
 
 




        The
aggregate amortization expense related to intangible assets subject to amortization for 2007 was $2.9 million. The estimated aggregate amortization expense for the years ended
December 28, 2008,
December 27, 2009, December 26, 2010, December 25, 2011 and December 30, 2012 is $3.5 million, $3.3 million, $3.2 million, $3.1 million and
$2.8 million, respectively.



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RED ROBIN GOURMET BURGERS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



This excerpt taken from the RRGB 10-K filed Feb 28, 2007.
Goodwill and Intangible Assets—Goodwill represents the excess of fair value over the net assets of the business acquired. Beginning with the adoption of Statement of Financial Accounting Standards (SFAS) No. 142, Business Combinations, (SFAS 142), in 2002, the price paid over the net fair value of the tangible net assets and identifiable intangible assets of acquired businesses, or goodwill, is no longer amortized. Franchise rights are amortized over the remaining acquired franchise right contract life using the straight-line method. Acquired lease rights are amortized over the remaining underlying lease term. Liquor licenses are amortized over their respective useful lives, generally ranging from one to five years. The recoverability of goodwill and other intangible assets is evaluated annually, at a minimum, or on an interim basis if events or circumstances indicate a possible inability to realize the carrying amount. Goodwill is tested for impairment on an annual basis; amortized intangible assets are reviewed when indicators of impairment are present. There have been no impairment losses related to goodwill and other intangible assets during the years presented in the accompanying financial statements. In assessing the recoverability of goodwill and other intangible assets, market values and projections regarding estimated future cash flows and other factors are used to determine the fair value of the respective assets. If these estimates or related projections change in the future, the Company may be required to record impairment charges for these assets.

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