ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On
ITEM 8.01. OTHER EVENTS Supplemental Risk Factor
The Company is supplementing the risk factors previously disclosed in the
Company's Annual Report on Form 10-K for the fiscal year ended
The novel coronavirus ("COVID-19") pandemic has disrupted and is expected to continue to disrupt our business, which has and could continue to materially affect our business, financial condition, and results of operations, for an extended period of time.
On
We continue to monitor state and local plans as they move along their phased approach to re-open their economies. We have developed a hybrid operating model that accommodates our limited capacity dining rooms together with enhanced To-Go, which includes a curbside and/or drive-up operating model, as permitted by local guidelines. This includes design changes to our building to better accommodate the increased To-Go sales and the expansion of outdoor seating areas where allowed. We also installed booth partitions in all of our restaurants as an added safety measure for our guests. In addition, we have increased our already strict sanitation requirements, are conducting daily health and temperature checks for all employees before they begin their shift and are requiring personal protective equipment to be worn by all restaurant employees at all times. As we work through the re-opening phases at each of our locations, the safety of our employees and guests remains our top priority.
As a result of the temporary dining room closures and the subsequent limited capacity restrictions for in-person dining, we have experienced a significant decrease in traffic which has impacted our operating results. While many of our dining rooms have re-opened, the capacity restrictions severely limit the number of guests we can serve. In addition, while we have seen significant sales growth in our To-Go program, even in those stores with dining rooms re-opened, we currently do not expect these sales will generate a similar profit margin to our normal operating model. We expect our operating results to continue to be impacted until at least such time that state and local restrictions are lifted, and our dining rooms can re-open at full capacity. We cannot predict how long the pandemic will last, how long it will take until all state and local restrictions will be lifted, or if dining rooms will be required to close again in areas severely impacted by the pandemic. In addition, we cannot predict the overall impact on the economy or consumer spending habits.
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The pandemic has also adversely affected our ability to open new restaurants. At
the onset of the pandemic, we delayed construction on all restaurants that were
not substantially complete. As of
In
Our suppliers could be adversely impacted by the pandemic. If our supplier's employees are unable to work, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with the pandemic, we could face shortages of food items or other supplies at our restaurants and our operations and sales could be adversely impacted by such interruptions.
The temporary closure of our dining rooms and subsequent re-opening at limited capacity has resulted in decreased staffing levels at our restaurants. We have taken compensation actions to support certain restaurant employees during the pandemic, but those actions may not be enough to compensate them until such time that our dining rooms can re-open at full capacity. Those restaurant employees might seek and find other employment during the interruption, which could have a material adverse effect on our ability to properly staff our restaurants with experienced team members once we resume our normal operations.
Our restaurant operations could be further disrupted if a significant number of restaurants have employees diagnosed with COVID-19 resulting in some or all of the restaurant's employees being quarantined and our restaurant facilities having to be disinfected. If a significant percentage of our workforce is unable to work, whether because of illness or required quarantine, our operations may be negatively impacted which could have a material adverse effect on our business.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (d) EXHIBITS 99.1 Press Release issued by the company onAugust 3, 2020 .
The information in this Current Report on Form 8-K at Item 2.02 and the Exhibit attached hereto shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.
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