Shake Shack Announces Third Quarter 2023 Financial Results

November 02, 2023 at 07:00 AM EDT

Total revenue of $276.2 million, up 21.2% versus 2022, including $265.0 million of Shack sales and $11.2 million of Licensing revenue.
System-wide sales of $438.9 million, up 24.3% versus 2022.
Same-Shack sales up 2.3% versus 2022.
Operating income of $5.7 million, versus an operating loss of $4.8 million in 2022.
- Shack-level operating profit⁽¹⁾ of $54.0 million, or 20.4% of Shack sales.
Net income of $8.1 million versus a net loss of $2.3 million in 2022.
- Adjusted EBITDA⁽¹⁾ of $35.8 million, up 80.7% versus 2022.
Net income attributable to Shake Shack Inc. of $7.6 million, or earnings of $0.19 per diluted share.
- Adjusted pro forma net income⁽¹⁾ of $7.5 million, or earnings of $0.17 per fully exchanged and diluted share.
Opened 10 new domestic Company-operated Shacks. Opened 15 new licensed Shacks, including locations in the Bahamas and China.

Shake Shack Inc. (“Shake Shack” or the “Company”) (NYSE: SHAK) has posted its results for the third quarter of 2023 in a Shareholder Letter in the Quarterly Results section of the Company's Investor Relations website, which can be found here: Q3 2023 Shake Shack Shareholder Letter.

Shake Shack will host a conference call at 8:00 a.m. ET. Hosting the call will be Randy Garutti, Chief Executive Officer, and Katherine Fogertey, Chief Financial Officer. The conference call can be accessed live over the phone by dialing (877) 407-0792, or for international callers by dialing (201) 689-8263. A replay of the call will be available until November 09, 2023 by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671; the passcode is 13740704.

The live audio webcast of the conference call will be accessible in the Events & Presentations section of the Company's Investor Relations website at investor.shakeshack.com. An archived replay of the webcast will also be available shortly after the live event has concluded.

(1)

Shack-level operating profit, Adjusted EBITDA and Adjusted pro forma net income (loss) are non-GAAP measures. A reconciliation to the most directly comparable financial measures presented in accordance with GAAP is set forth in the schedules accompanying this release. See “Non-GAAP Financial Measures” below.

About Shake Shack

Shake Shack serves elevated versions of American classics using only the best ingredients. It’s known for its delicious made-to-order Angus beef burgers, crispy chicken, hand-spun milkshakes, house-made lemonades, beer, wine, and more. With its high-quality food at a great value, warm hospitality, and a commitment to crafting uplifting experiences, Shake Shack quickly became a cult-brand with widespread appeal. Shake Shack’s purpose is to Stand For Something Good®, from its premium ingredients and employee development, to its inspiring designs and deep community investment. Since the original Shack opened in 2004 in NYC’s Madison Square Park, the Company has expanded to over 500 locations system-wide, including over 320 in 33 U.S. States and the District of Columbia, and 180 international locations across London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo, Seoul and more.

Skip the line with the Shack App, a mobile ordering app that lets you save time by ordering ahead! Guests can select their location, pick their food, choose a pickup time and their meal will be cooked-to-order and timed to arrival. Available on iOS and Android.

Definitions

The following definitions apply to these terms as used in this release:

"Shack sales" is defined as the aggregate sales of food, beverages, gift card breakage income and Shake Shack branded merchandise at domestic Company-operated Shacks and excludes sales from licensed Shacks.

“System-wide sales” is an operating measure and consists of sales from the Company's domestic Company-operated Shacks, domestic licensed Shacks and international licensed Shacks. The Company does not recognize the sales from licensed Shacks as revenue. Of these amounts, revenue is limited to licensing revenue based on a percentage of sales from domestic and international licensed Shacks, as well as certain up-front fees, such as territory fees and opening fees.

"Same-Shack sales" represents Shack sales for the comparable Shack base, which is defined as the number of domestic Company-operated Shacks open for 24 full fiscal months or longer. For consecutive days that Shacks were temporarily closed, the comparative period was also adjusted.

"Shack-level operating profit," a non-GAAP measure, also referred to as restaurant profit, is defined as Shack sales less Shack-level operating expenses including Food and paper costs, Labor and related expenses, Other operating expenses and Occupancy and related expenses.

"Shack-level operating profit margin," a non-GAAP measure, also referred to as restaurant margin, is defined as Shack sales less Shack-level operating expenses including Food and paper costs, Labor and related expenses, Other operating expenses and Occupancy and related expenses as a percentage of Shack sales.

“EBITDA,” a non-GAAP measure, is defined as Net income (loss) before interest expense (net of interest income), Income tax expense (benefit), and Depreciation and amortization expense.

“Adjusted EBITDA,” a non-GAAP measure, is defined as EBITDA (as defined above), excluding equity-based compensation expense, Impairment and loss on disposal of assets, amortization of cloud-based software implementation costs, as well as certain non-recurring items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations.

"Adjusted pro forma net income," a non-GAAP measure, represents Net income (loss) attributable to Shake Shack Inc. assuming the full exchange of all outstanding SSE Holdings, LLC membership interests ("LLC Interests") for shares of Class A common stock, adjusted for certain non-recurring and other items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations.


SHAKE SHACK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share amounts)

	September 27 2023		December 28 2022
ASSETS
Current assets:
Cash and cash equivalents	$	190,020	$	230,521
Marketable securities		94,957		80,707
Accounts receivable, net		13,889		13,877
Inventories		4,608		4,184
Prepaid expenses and other current assets		19,762		14,699
Total current assets		323,236		343,988
Property and equipment, net of accumulated depreciation of $353,303 and $290,362, respectively		525,557		467,031
Operating lease assets		397,870		367,488
Deferred income taxes, net		302,156		300,538
Other assets		16,037		15,817
TOTAL ASSETS	$	1,564,856	$	1,494,862
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	21,251	$	20,407
Accrued expenses		47,630		47,945
Accrued wages and related liabilities		18,164		17,576
Operating lease liabilities, current		47,610		42,238
Other current liabilities		17,522		19,552
Total current liabilities		152,177		147,718
Long-term debt		245,375		244,589
Long-term operating lease liabilities		463,370		427,227
Liabilities under tax receivable agreement, net of current portion		235,614		234,893
Other long-term liabilities		26,322		20,687
Total liabilities		1,122,858		1,075,114
Commitments and contingencies
Stockholders' equity:
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of September 27, 2023 and December 28, 2022.		—		—
Class A common stock, $0.001 par value—200,000,000 shares authorized; 39,466,268 and 39,284,998 shares issued and outstanding as of September 27, 2023 and December 28, 2022, respectively.		39		39
Class B common stock, $0.001 par value—35,000,000 shares authorized; 2,834,513 and 2,869,513 shares issued and outstanding as of September 27, 2023 and December 28, 2022, respectively.		3		3
Additional paid-in capital		423,811		415,611
Accumulated deficit		(7,496)		(20,537)
Accumulated other comprehensive loss		(3)		—
Total stockholders' equity attributable to Shake Shack Inc.		416,354		395,116
Non-controlling interests		25,644		24,632
Total equity		441,998		419,748
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,564,856	$	1,494,862

SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
(in thousands, except per share amounts)

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	September 27 2023			September 28 2022			September 27 2023			September 28 2022
Shack sales	$	264,980	95.9 %	$	219,501	96.4 %	$	771,044	96.2 %	$	639,346	96.6 %
Licensing revenue		11,227	4.1 %		8,313	3.6 %		30,246	3.8 %		22,611	3.4 %
TOTAL REVENUE		276,207	100.0 %		227,814	100.0 %		801,290	100.0 %		661,957	100.0 %
Shack-level operating expenses⁽¹⁾:
Food and paper costs		77,180	29.1 %		67,774	30.9 %		224,752	29.1 %		193,645	30.3 %
Labor and related expenses		76,233	28.8 %		64,638	29.4 %		225,655	29.3 %		190,954	29.9 %
Other operating expenses⁽²⁾		37,307	14.1 %		33,680	15.3 %		108,352	14.1 %		96,002	15.0 %
Occupancy and related expenses		20,300	7.7 %		17,337	7.9 %		58,684	7.6 %		50,270	7.9 %
General and administrative expenses⁽²⁾		30,939	11.2 %		26,931	11.8 %		93,726	11.7 %		87,804	13.3 %
Depreciation and amortization expense		23,130	8.4 %		18,647	8.2 %		66,704	8.3 %		53,589	8.1 %
Pre-opening costs		4,969	1.8 %		3,041	1.3 %		14,103	1.8 %		8,576	1.3 %
Impairment and loss on disposal of assets		492	0.2 %		592	0.3 %		2,098	0.3 %		1,697	0.3 %
TOTAL EXPENSES		270,550	98.0 %		232,640	102.1 %		794,074	99.1 %		682,537	103.1 %
INCOME (LOSS) FROM OPERATIONS		5,657	2.0 %		(4,826)	(2.1) %		7,216	0.9 %		(20,580)	(3.1) %
Other income, net		3,441	1.2 %		1,482	0.7 %		9,505	1.2 %		1,731	0.3 %
Interest expense		(433)	(0.2) %		(475)	(0.2) %		(1,241)	(0.2) %		(1,145)	(0.2) %
INCOME (LOSS) BEFORE INCOME TAXES		8,665	3.1 %		(3,819)	(1.7) %		15,480	1.9 %		(19,994)	(3.0) %
Income tax expense (benefit)		529	0.2 %		(1,508)	(0.7) %		1,743	0.2 %		(5,098)	(0.8) %
NET INCOME (LOSS)		8,136	2.9 %		(2,311)	(1.0) %		13,737	1.7 %		(14,896)	(2.3) %
Less: Net income (loss) attributable to non-controlling interests		509	0.2 %		(287)	(0.1) %		696	0.1 %		(1,522)	(0.2) %
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.	$	7,627	2.8 %	$	(2,024)	(0.9) %	$	13,041	1.6 %	$	(13,374)	(2.0) %
Earnings (loss) per share of Class A common stock:
Basic	$	0.19		$	(0.05)		$	0.33		$	(0.34)
Diluted	$	0.19		$	(0.05)		$	0.31		$	(0.34)
Weighted average shares of Class A common stock outstanding:
Basic		39,460			39,274			39,402			39,221
Diluted		43,978			39,274			43,884			39,221

_____________________
(1)		As a percentage of Shack sales.
(2)		The Company has elected to reclassify certain marketing expenses from Other operating expenses to General and administrative expenses for the thirteen and thirty-nine weeks ended September 27, 2023. The prior periods have been updated to conform with the current year presentation. The reclassification does not have a material impact on our results.

SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

	Thirty-Nine Weeks Ended
	September 27 2023		September 28 2022
OPERATING ACTIVITIES
Net income (loss) (including amounts attributable to non-controlling interests)	$	13,737	$	(14,896)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization expense		66,704		53,589
Amortization of debt issuance costs		786		786
Amortization of cloud computing asset		1,320		1,080
Non-cash operating lease cost		49,775		43,159
Equity-based compensation		11,220		10,155
Deferred income taxes		7,092		12,215
Non-cash interest expense		94		181
Gain on sale of equity securities		(81)		—
Net amortization of discount on held-to-maturity securities		(939)		—
Impairment and loss on disposal of assets		2,098		1,697
Unrealized loss on equity securities		—		400
Changes in operating assets and liabilities:
Accounts receivable		(12)		1,840
Inventories		(424)		(146)
Prepaid expenses and other current assets		(3,056)		(4,767)
Other assets		(4,750)		(5,966)
Accounts payable		(5,064)		(2,069)
Accrued expenses		(6,424)		(17,783)
Accrued wages and related liabilities		555		3,052
Other current liabilities		(2,757)		4,376
Operating lease liabilities		(41,725)		(32,558)
Other long-term liabilities		2,442		(10)
NET CASH PROVIDED BY OPERATING ACTIVITIES		90,591		54,335
INVESTING ACTIVITIES
Purchases of property and equipment		(113,033)		(94,797)
Purchases of held-to-maturity securities		(94,019)		—
Purchases of equity securities		(690)		(415)
Sales of equity securities		81,478		—
NET CASH USED IN INVESTING ACTIVITIES		(126,264)		(95,212)
FINANCING ACTIVITIES
Payments on principal of finance leases		(2,383)		(2,260)
Distributions paid to non-controlling interest holders		(131)		(389)
Proceeds from stock option exercises		631		334
Employee withholding taxes related to net settled equity awards		(2,942)		(2,214)
NET CASH USED IN FINANCING ACTIVITIES		(4,825)		(4,529)
Effect of exchange rate changes on cash and cash equivalents		(3)		(2)
DECREASE IN CASH AND CASH EQUIVALENTS		(40,501)		(45,408)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		230,521		302,406
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	190,020	$	256,998

SHAKE SHACK INC.

NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

To supplement the condensed consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses the following non-GAAP financial measures: Shack-level operating profit, Shack-level operating profit margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share (collectively the "non-GAAP financial measures").

Shack-Level Operating Profit

Shack-level operating profit, also referred to as restaurant profit, is defined as Shack sales less Shack-level operating expenses including Food and paper costs, Labor and related expenses, Other operating expenses and Occupancy and related expenses.

How This Measure Is Useful

When used in conjunction with GAAP financial measures, Shack-level operating profit and Shack-level operating profit margin are supplemental measures of operating performance that the Company believes are useful measures to evaluate the performance and profitability of its Shacks. Additionally, Shack-level operating profit and Shack-level operating profit margin are key metrics used internally by management to develop internal budgets and forecasts, as well as assess the performance of its Shacks relative to budget and against prior periods. It is also used to evaluate employee compensation as it serves as a metric in certain performance-based employee bonus arrangements. The Company believes presentation of Shack-level operating profit and Shack-level operating profit margin provides investors with a supplemental view of its operating performance that can provide meaningful insights to the underlying operating performance of the Shacks, as these measures depict the operating results that are directly impacted by the Shacks and exclude items that may not be indicative of, or are unrelated to, the ongoing operations of the Shacks. It may also assist investors to evaluate the Company's performance relative to peers of various sizes and maturities and provides greater transparency with respect to how management evaluates the business, as well as the financial and operational decision-making.

Limitations of the Usefulness of this Measure

Shack-level operating profit and Shack-level operating profit margin may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of Shack-level operating profit and Shack-level operating profit margin is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Shack-level operating profit excludes certain costs, such as General and administrative expenses and Pre-opening costs, which are considered normal, recurring cash operating expenses and are essential to support the operation and development of the Company's Shacks. Therefore, this measure may not provide a complete understanding of the Company's operating results as a whole and Shack-level operating profit and Shack-level operating profit margin should be reviewed in conjunction with the Company's GAAP financial results. A reconciliation of Shack-level operating profit to Loss from Operations, the most directly comparable GAAP financial measure, is set forth below.


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(dollar amounts in thousands)	September 27 2023		September 28 2022		September 27 2023		September 28 2022
Income (loss) from operations	$	5,657	$	(4,826)	$	7,216	$	(20,580)
Less:
Licensing revenue		11,227		8,313		30,246		22,611
Add:
General and administrative expenses⁽¹⁾		30,939		26,931		93,726		87,804
Depreciation and amortization expense		23,130		18,647		66,704		53,589
Pre-opening costs		4,969		3,041		14,103		8,576
Impairment and loss on disposal of assets		492		592		2,098		1,697
Shack-level operating profit	$	53,960	$	36,072	$	153,601	$	108,475

Total revenue	$	276,207	$	227,814	$	801,290	$	661,957
Less: Licensing revenue		11,227		8,313		30,246		22,611
Shack sales	$	264,980	$	219,501	$	771,044	$	639,346

Shack-level operating profit margin^(2,3)		20.4 %		16.4 %		19.9 %		17.0 %

(1)		Certain marketing expenses have been reclassified from Other operating expenses to General and administrative expenses in the prior year to conform with the current year presentation. The reclassification does not have a material impact on our results.
(2)		For the thirty-nine weeks ended September 28, 2022, Shack-level operating profit margin includes a $1,281 cumulative catch-up adjustment for gift card breakage income, recognized in Shack sales.
(3)		As a percentage of Shack sales.

SHAKE SHACK INC.

NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

EBITDA and Adjusted EBITDA

EBITDA is defined as Net income (loss) before interest expense (net of interest income), Income tax expense (benefit) and Depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA (as defined above) excluding equity-based compensation expense, Impairment and loss on the disposal of assets, amortization of cloud-based software implementation costs, as well as certain non-recurring items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations.

In the first quarter of 2023, the Company revised its definition of Adjusted EBITDA to exclude deferred lease costs and executive transition costs as adjustments to the measure. The Company believes excluding both of these items improves the usefulness of Adjusted EBITDA as these items are characteristic of the Company’s ongoing operations and such presentation is consistent with other companies in the restaurant industry. Previously reported periods have been revised to conform to the current period presentation.

How These Measures Are Useful

When used in conjunction with GAAP financial measures, EBITDA and adjusted EBITDA are supplemental measures of operating performance that the Company believes are useful measures to facilitate comparisons to historical performance and competitors' operating results. Adjusted EBITDA is a key metric used internally by management to develop internal budgets and forecasts and also serves as a metric in its performance-based equity incentive programs and certain bonus arrangements. The Company believes presentation of EBITDA and adjusted EBITDA provides investors with a supplemental view of the Company's operating performance that facilitates analysis and comparisons of its ongoing business operations because they exclude items that may not be indicative of the Company's ongoing operating performance.

Limitations of the Usefulness of These Measures

EBITDA and adjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of EBITDA and adjusted EBITDA is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. EBITDA and adjusted EBITDA exclude certain normal recurring expenses. Therefore, these measures may not provide a complete understanding of the Company's performance and should be reviewed in conjunction with the GAAP financial measures.

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(dollar amounts in thousands)	September 27 2023		September 28 2022		September 27 2023		September 28 2022
Net income (loss)	$	8,136	$	(2,311)	$	13,737	$	(14,896)
Depreciation and amortization expense		23,130		18,647		66,704		53,589
Interest expense, net		(845)		475		(164)		1,145
Income tax expense (benefit)		529		(1,508)		1,743		(5,098)
EBITDA	$	30,950	$	15,303	$	82,020	$	34,740

Equity-based compensation		3,691		3,515		11,425		10,155
Amortization of cloud-based software implementation costs		440		397		1,320		1,080
Impairment and loss on disposal of assets		492		592		2,098		1,697
Legal settlements		—		—		1,004		6,750
Severance		211		—		211		—
Gift card breakage cumulative catch-up adjustment		—		—		—		(1,281)
Other⁽¹⁾		—		—		2,321		—
Adjusted EBITDA	$	35,784	$	19,807	$	100,399	$	53,141

Adjusted EBITDA margin⁽²⁾		13.0 %		8.7 %		12.5 %		8.0 %

(1)		Related to professional fees for a non-recurring matter.
(2)		Calculated as a percentage of Total revenue, which was $276.2 million and $801.3 million for the thirteen and thirty-nine weeks ended September 27, 2023, respectively, and $227.8 million and $662.0 million for the thirteen and thirty-nine weeks ended September 28, 2022, respectively.

SHAKE SHACK INC.

NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

Adjusted Pro Forma Net Income (Loss) and Adjusted Pro Forma Earnings (Loss) Per Fully Exchanged and Diluted Share

Adjusted pro forma net income (loss) represents Net income (loss) attributable to Shake Shack Inc. assuming the full exchange of all outstanding SSE Holdings, LLC membership interests ("LLC Interests") for shares of Class A common stock, adjusted for certain non-recurring items that the Company does not believe are directly related to its core operations and may not be indicative of recurring business operations. Adjusted pro forma earnings (loss) per fully exchanged and diluted share is calculated by dividing adjusted pro forma net income (loss) by the weighted-average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Interests, after giving effect to the dilutive effect of outstanding equity-based awards.

In the first quarter of 2023, the Company revised its definition of Adjusted Pro Forma Net Income to exclude executive transition costs as an adjustment to the measure. Previously reported periods have been revised to conform to the current period presentation. See "EBITDA and Adjusted EBITDA" above for additional information.

How These Measures Are Useful

When used in conjunction with GAAP financial measures, adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share are supplemental measures of operating performance that the Company believes are useful measures to evaluate performance period over period and relative to its competitors. By assuming the full exchange of all outstanding LLC Interests, the Company believes these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income (loss) attributable to Shake Shack Inc. driven by increases in its ownership of SSE Holdings, which are unrelated to the Company's operating performance, and excludes items that are non-recurring or may not be indicative of ongoing operating performance.

Limitations of the Usefulness of These Measures

Adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share should not be considered alternatives to Net income (loss) and earnings (loss) per share, as determined under GAAP. While these measures are useful in evaluating the Company's performance, it does not account for the earnings attributable to the non-controlling interest holders and therefore does not provide a complete understanding of the Net income (loss) attributable to Shake Shack Inc. Adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share should be evaluated in conjunction with GAAP financial results.

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(in thousands, except per share amounts)	September 27 2023		September 28 2022		September 27 2023		September 28 2022
Numerator:
Net income (loss) attributable to Shake Shack Inc.	$	7,627	$	(2,024)	$	13,041	$	(13,374)
Adjustments:
Reallocation of Net income (loss) attributable to non-controlling interests from the assumed exchange of LLC Interests⁽¹⁾		509		(287)		696		(1,522)
Legal settlements		—		—		1,004		6,750
Gift card breakage cumulative catch-up adjustment		—		—		—		(1,281)
Severance		211		—		211		—
Other⁽²⁾		—		—		2,321		—
Tax impact of above adjustments⁽³⁾		(810)		(11)		(2,146)		(922)
Adjusted pro forma net income (loss)	$	7,537	$	(2,322)	$	15,127	$	(10,349)

Denominator:
Weighted average shares of Class A common stock outstanding—diluted		43,978		39,274		43,884		39,221
Adjustments:
Assumed exchange of LLC Interests for shares of Class A common stock⁽¹⁾		—		2,871		—		2,899
Adjusted pro forma fully exchanged weighted average shares of Class A common stock outstanding—diluted		43,978		42,145		43,884		42,120

Adjusted pro forma earnings (loss) per fully exchanged share—diluted	$	0.17	$	(0.06)	$	0.34	$	(0.25)

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	September 27 2023		September 28 2022		September 27 2023		September 28 2022
Earnings (loss) per share of Class A common stock—diluted	$	0.19	$	(0.05)	$	0.31	$	(0.34)
Assumed exchange of LLC Interests for shares of Class A common stock⁽¹⁾		—		—		—		(0.01)
Non-GAAP adjustments⁽⁴⁾		(0.02)		(0.01)		0.03		0.10
Adjusted pro forma earnings (loss) per fully exchanged share—diluted	$	0.17	$	(0.06)	$	0.34	$	(0.25)

(1)		Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income (loss) attributable to non-controlling interests.
(2)		Related to professional fees for a non-recurring matter.
(3)		Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 15.1% and 20.5% for the thirteen and thirty-nine weeks ended September 27, 2023, respectively, and 39.2% and 28.8% for the thirteen and thirty-nine weeks ended September 28, 2022, respectively. Amounts include provisions for U.S. federal income taxes, certain LLC entity-level taxes and foreign withholding taxes, assuming the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction.
(4)		Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation of Adjusted Pro Forma Net Income (Loss) above, for additional information.

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