SHAKE SHACK INC., 10-Q filed on 5/15/2015
Quarterly Report
Document and Entity Information Document
3 Months Ended
Apr. 1, 2015
May 7, 2015
Class A common stock
May 7, 2015
Class B common stock
Document Information [Line Items]
 
 
 
Document type
10-Q 
 
 
Amendment flag
false 
 
 
Document period end date
Apr. 01, 2015 
 
 
Document fiscal year focus
2015 
 
 
Document fiscal period focus
Q1 
 
 
Entity registrant name
Shake Shack Inc. 
 
 
Entity central index key
0001620533 
 
 
Current fiscal year end date
--12-30 
 
 
Entity filer category
Non-accelerated Filer 
 
 
Entity current reporting status
No 
 
 
Entity common stock, shares outstanding
 
12,058,147 
24,191,853 
Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Apr. 1, 2015
Dec. 31, 2014
Current assets
 
 
Cash
$ 60,834 
$ 2,677 
Accounts receivable
2,842 
3,278 
Inventories
404 
529 
Prepaid expenses and other current assets
2,040 
1,441 
Deferred income taxes
20 
20 
Total current assets
66,140 
7,945 
Property and equipment, net
75,704 
70,124 
Deferred income taxes, net
6,087 
141 
Other assets
2,972 
4,752 
TOTAL ASSETS
150,903 
82,962 
Current liabilities
 
 
Short-term borrowings
0 
32,000 
Accounts payable
4,618 
6,440 
Accrued expenses
4,201 
5,578 
Accrued wages and related liabilities
2,583 
2,410 
Other current liabilities
2,267 
1,749 
Total current liabilities
13,669 
48,177 
Notes payable
313 
313 
Deferred rent
18,997 
17,853 
Other long-term liabilities
8,893 
4,019 
Total liabilities
41,872 
70,362 
Commitments and contingencies
   
   
Stockholders' / members' equity
 
 
Members' equity
 
12,600 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of April 1, 2015
0 
 
Common stock
 
0 
Additional paid-in capital
111,049 
 
Accumulated deficit
(897)
 
Total stockholders' equity attributable to Shake Shack Inc.
110,188 
12,600 
Non-controlling interests
(1,157)
 
Total equity
109,031 
12,600 
TOTAL LIABILITIES AND STOCKHOLDERS' / MEMBERS' EQUITY
150,903 
82,962 
Class A common stock
 
 
Stockholders' / members' equity
 
 
Common stock
12 
 
Class B common stock
 
 
Stockholders' / members' equity
 
 
Common stock
$ 24 
 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Apr. 1, 2015
Dec. 31, 2014
Preferred stock, shares authorized
10,000,000 
 
Preferred stock, shares issued
0 
 
Preferred stock, shares outstanding
0 
 
Common stock par value (in usd per share)
 
$ 0.01 
Common stock, shares authorized
 
100 
Common stock, shares, issued
 
0 
Common stock, shares, outstanding
 
0 
Class A common stock
 
 
Common stock par value (in usd per share)
$ 0.001 
 
Common stock, shares authorized
200,000,000 
 
Common stock, shares, issued
12,058,147 
 
Common stock, shares, outstanding
12,058,147 
 
Class B common stock
 
 
Common stock par value (in usd per share)
$ 0.001 
 
Common stock, shares authorized
35,000,000 
 
Common stock, shares, issued
24,191,853 
 
Common stock, shares, outstanding
24,191,853 
 
Condensed Consolidated Statement of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Apr. 1, 2015
Mar. 26, 2014
Shack sales
$ 36,047 
$ 22,640 
Licensing revenue
1,761 
1,556 
TOTAL REVENUE
37,808 
24,196 
Shack-level operating expenses:
 
 
Food and paper costs
11,004 
6,913 
Labor and related expenses
9,101 
6,253 
Other operating expenses
3,480 
2,376 
Occupancy and related expenses
3,183 
1,893 
General and administrative expenses
18,385 
3,363 
Depreciation expense
2,191 
1,231 
Pre-opening costs
1,413 
933 
Loss on disposal of property and equipment
0 
5 
TOTAL EXPENSES
48,757 
22,967 
OPERATING INCOME (LOSS)
(10,949)
1,229 
Interest expense, net
78 
35 
INCOME (LOSS) BEFORE INCOME TAXES
(11,027)
1,194 
Income tax expense (benefit)
233 
102 
NET INCOME (LOSS)
(11,260)
1,092 
Less: net income attributable to non-controlling interests
(1,408)
0 
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
(12,668)
1,092 
Earnings per share of Class A common stock(1):
 
 
Basic (in USD per share)
$ (1.06)1
$ 0.04 1
Diluted (in USD per share)
$ (1.06)1
$ 0.04 1
Weighted-average shares of Class A common stock outstanding(1):
 
 
Basic (shares)
11,953 1
29,963 1
Diluted (shares)
11,953 1
30,125 1
Pro forma earnings per share of Class A common stock
 
 
Basic (in USD per share)
$ (0.91)2
 
Diluted (in USD per share)
$ (0.91)2
 
Pro forma
 
 
Shack-level operating expenses:
 
 
Income tax expense (benefit)
(1,513)2
 
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
$ (10,922)2
 
Condensed Consolidated Statements of Income (Parenthetical) (Class A common stock, Common stock)
0 Months Ended 2 Months Ended 3 Months Ended
Feb. 4, 2015
Apr. 1, 2015
Apr. 1, 2015
Shares issued during the period
5,968,841 
5,750,000 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
339,306 
339,306 
339,306 
IPO
 
 
 
Shares issued during the period
5,750,000 
 
5,750,000 
Consolidated Statements of Stockholders' and Members' Equity (USD $)
In Thousands, except Share data, unless otherwise specified
Total
USD ($)
Class A common stock
Class B common stock
Members' Equity
USD ($)
Common stock
Class A common stock
USD ($)
Common stock
Class B common stock
USD ($)
Additional Paid-In Capital
USD ($)
Accumulated Deficit
USD ($)
Non- Controlling Interest
USD ($)
Beginning balance at Dec. 31, 2014
$ 12,600 
 
 
$ 12,600 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income (loss)
(13,049)
 
 
(13,049)
 
 
 
 
 
Member distributions
(11,125)
 
 
(11,125)
 
 
 
 
 
Equity-based compensation recognized prior to the Organizational Transactions
7,731 
 
 
7,731 
 
 
 
 
 
Ending balance at Feb. 03, 2015
 
 
 
 
 
 
 
 
 
Beginning balance at Dec. 31, 2014
12,600 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income (loss)
(11,260)
 
 
 
 
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
 
 
 
 
339,306 
 
 
 
 
Ending balance at Apr. 01, 2015
109,031 
 
 
 
12 
 
 
 
 
Common stock, balance (shares) at Apr. 01, 2015
 
12,058,147 
24,191,853 
 
12,058,147 
 
 
 
 
Beginning balance at Feb. 03, 2015
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income (loss)
1,789 
 
 
 
 
 
 
381 
1,408 
Shares issued during the period
 
 
 
 
5,750,000 
 
 
 
 
Issuance of Class A common stock sold in initial public offering, net of offering costs
109,362 
 
 
 
6 
 
109,356 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
 
 
 
 
339,306 
 
 
 
 
Issuance of Class A common stock in settlement of unit appreciation rights
0 
 
 
 
0 
 
 
 
 
Effect of organizational transactions (shares)
 
 
 
 
5,968,841 
24,191,853 
 
 
 
Effect of the Organizational Transactions
30 
 
 
3,843 
6 
24 
 
(1,278)
(2,565)
Equity-based compensation recognized subsequent to the Organizational Transactions
792 
 
 
 
 
 
792 
 
 
Deferred tax adjustment related to tax receivable agreement
901 
 
 
 
 
 
901 
 
 
Ending balance at Apr. 01, 2015
$ 109,031 
 
 
 
$ 12 
$ 24 
$ 111,049 
$ (897)
$ (1,157)
Common stock, balance (shares) at Apr. 01, 2015
 
12,058,147 
24,191,853 
 
12,058,147 
24,191,853 
 
 
 
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 1, 2015
Mar. 26, 2014
OPERATING ACTIVITIES
 
 
Net income (loss)
$ (11,260)
$ 1,092 
Adjustments to reconcile net income (loss) to net cash provided by operating activities
 
 
Depreciation expense
2,191 
1,231 
Equity-based compensation
13,159 
41 
Deferred income taxes
0 
0 
Non-cash interest expense
66 
13 
Loss on disposal of property and equipment
0 
5 
Changes in operating assets and liabilities:
 
 
Accounts receivable
436 
103 
Inventories
125 
16 
Prepaid expenses and other current assets
(599)
(67)
Other assets
1,954 
(1)
Accounts payable
(255)
(49)
Accrued expenses
(2,350)
(550)
Accrued wages and related liabilities
173 
(606)
Other current liabilities
341 
(482)
Deferred rent
1,397 
646 
Other long-term liabilities
(202)
19 
NET CASH PROVIDED BY OPERATING ACTIVITIES
5,176 
1,411 
INVESTING ACTIVITIES
 
 
Purchases of property and equipment
(8,558)
(1,760)
NET CASH USED IN INVESTING ACTIVITIES
(8,558)
(1,760)
FINANCING ACTIVITIES
 
 
Proceeds from revolving credit facility
4,000 
0 
Payments on revolving credit facility
(36,000)
0 
Deferred financing costs
(92)
(293)
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and offering costs
109,362 
0 
Proceeds from issuance of Class B common stock
30 
0 
Member distributions
(11,125)
(2,094)
Employee withholding taxes related to net settled equity awards
(4,636)
0 
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
61,539 
(2,387)
INCREASE (DECREASE) IN CASH
58,157 
(2,736)
CASH AT BEGINNING OF PERIOD
2,677 
13,076 
CASH AT END OF PERIOD
$ 60,834 
$ 10,340 
Organization
Organization
ORGANIZATION AND NATURE OF OPERATIONS
Shake Shack Inc. was formed on September 23, 2014 as a Delaware corporation for the purpose of facilitating an initial public offering and other related transactions in order to carry on the business of SSE Holdings, LLC and its subsidiaries. Unless the context otherwise requires, references to "we," "us," "our," "Shake Shack" and the "Company" refer to Shake Shack Inc. and its subsidiaries, including SSE Holdings, LLC, which we refer to as "SSE Holdings."
We operate and license Shake Shack restaurants ("Shacks"), which serve hamburgers, hot dogs, crinkle-cut fries, shakes, frozen custard, beer, wine and more. As of April 1, 2015, there were 66 Shacks in operation, system-wide, of which 34 were domestic company-operated Shacks, five were domestic licensed Shacks and 27 were international licensed Shacks.
Initial Public Offering
On February 4, 2015, we completed an initial public offering ("IPO") of 5,750,000 shares of our Class A common stock at a public offering price of $21.00 per share, which includes 750,000 shares issued pursuant to the underwriters' over-allotment option. We received $112,298 in proceeds, net of underwriting discounts and commissions, which we used to purchase newly-issued membership interests from SSE Holdings at a price per interest equal to the initial public offering price of our Class A common stock.
Organizational Transactions
In connection with the IPO, we completed the following transactions (the "Organizational Transactions"):
▪
We amended and restated the limited liability company agreement of SSE Holdings ("LLC Agreement") to, among other things, (i) provide for a new single class of common membership interests in SSE Holdings ("LLC Interests"), (ii) exchange all of the membership interests of the then-existing holders of SSE Holdings’ membership interests ("Original SSE Equity Owners") for LLC Interests and (iii) appoint Shake Shack as the sole managing member of SSE Holdings. See Note 7.
▪
We amended and restated our certificate of incorporation to, among other things, (i) provide for Class B common stock with voting rights but no economic rights and (ii) issue shares of Class B common stock to the Original SSE Equity Owners on a one-to-one basis with the number of LLC Interests they own. See Note 7.
▪
We acquired, by merger, two entities that were members of SSE Holdings ("Former SSE Equity Owners"), for which we issued 5,968,841 shares of Class A common stock as merger consideration (the "Merger"). The only assets held by the Former SSE Equity Owners were 5,968,841 LLC Interests and a corresponding number of shares of Class B common stock. Upon consummation of the Merger, we canceled the 5,968,841 shares of Class B common stock and recognized the 5,968,841 of LLC Interests at carrying value, as the Merger is considered to be a transaction between entities under common control.
Following the completion of the Organizational Transactions, we own 33.3% of SSE Holdings. The SSE Holdings members subsequent to the Merger (the "Continuing SSE Equity Owners") own the remaining 66.7% of SSE Holdings. We are the sole managing member of SSE Holdings and, although we have a minority economic interest in SSE Holdings, we have the sole voting power in, and control the management of, SSE Holdings. Accordingly, we consolidated the financial results of SSE Holdings and reported a non-controlling interest in our condensed consolidated financial statements.
As the Organizational Transactions are considered transactions between entities under common control, the financial statements for periods prior to the IPO and Organizational Transactions have been adjusted to combine the previously separate entities for presentation purposes.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Shake Shack Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on a basis consistent in all material respects with the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. In our opinion, all adjustments necessary for a fair presentation of our financial position and results of operation have been included. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
The accompanying Condensed Consolidated Balance Sheet as of December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
We do not have any components of other comprehensive income recorded within our condensed consolidated financial statements, and, therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements.
Fiscal Year
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal 2015 contains 52 weeks and ends on December 30, 2015. Fiscal 2014 contained 53 weeks and ended on December 31, 2014. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates
The preparation of these condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements       
In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-05, Customers' Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"). ASU 2015-05 provides guidance in evaluating whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the software license element of the arrangement should be accounted for as an acquisition of a software license. If the arrangement does not contain a software license, it should be accounted for as a service contract. ASU 2015-05 is effective for reporting periods beginning after December 15, 2015 and may be adopted either retrospectively or prospectively. We are currently evaluating the impact ASU 2015-05 will have on our consolidated financial statements.
In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. ASU 2015-03 is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2015-03 is not expected to have a material effect our consolidated financial position, results of operations or cash flows.
In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation ("ASU 2015-02"). ASU 2015-02 amends the existing guidance to: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (ii) eliminate the presumption that a general partner should consolidate a limited partnership; (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. ASU 2015-02 is effective for reporting periods beginning after December 15, 2015. We are currently evaluating the impact ASU 2015-02 will have on our consolidated financial statements.
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes the existing revenue recognition guidance and clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 is effective, on a retrospective basis, for reporting periods beginning after December 15, 2016. Early adoption is permitted, subject to certain conditions. We are currently evaluating the impact ASU 2014-09 will have on our consolidated financial position, results of operations and cash flows.
Fair Value Measurements
Fair Value Measurements
FAIR VALUE MEASUREMENTS
The carrying value of our financial instruments, including cash, accounts receivable, accounts payable, and accrued expenses as of April 1, 2015 and December 31, 2014 approximated their fair value due to the short-term nature of these financial instruments. Assets and liabilities that are measured at fair value on a non-recurring basis include our long-lived assets. There were no impairments recognized during the thirteen weeks ended April 1, 2015 and March 26, 2014.
Inventories
Inventories
INVENTORIES
Inventories as of April 1, 2015 and December 31, 2014 consisted of the following:
 
April 1,
2015
 
December 31,
2014
Food
$
233

 
$
354

Wine
29

 
28

Beer
31

 
33

Beverages
38

 
42

Retail merchandise
73

 
72

Inventories
$
404

 
$
529

Supplemental Balance Sheet Information
Supplemental Balance Sheet Information
SUPPLEMENTAL BALANCE SHEET INFORMATION
The components of other current liabilities as of April 1, 2015 and December 31, 2014 are as follows:
 
April 1,
2015
 
December 31,
2014
Sales tax payable
$
1,005

 
$
736

Gift card liability
578

 
625

Other
684

 
388

Other current liabilities
$
2,267

 
$
1,749

The components of other long-term liabilities as of April 1, 2015 and December 31, 2014 are as follows:
 
April 1,
2015
 
December 31,
2014
Deferred compensation
$
2,163

 
$
2,141

Liability under tax receivable agreement
5,054

 
—

Other
1,676

 
1,878

Other long-term liabilities
$
8,893

 
$
4,019

Debt
Debt
DEBT
In January 2015, we executed a Third Amended and Restated Credit Agreement, which became effective on February 4, 2015 (together with the prior agreements, the "Revolving Credit Facility"), which provides for a revolving total commitment amount of $50,000, of which $20,000 is available immediately. The Revolving Credit Facility will mature and all amounts outstanding will be due and payable five years from the effective date. The Revolving Credit Facility permits the issuance of letters of credit upon our request of up to $10,000. Borrowings under the Revolving Credit Facility bear interest at either: (i) LIBOR plus a percentage ranging from 2.5% to 3.5% or (ii) the prime rate plus a percentage ranging from 0.0% to 1.0%, depending on the type of borrowing made under the Revolving Credit Facility. As of December 31, 2014, amounts outstanding under the Revolving Credit Facility totaled $32,000, classified as short-term borrowings on the Consolidated Balance Sheet. During the thirteen weeks ended April 1, 2015, we borrowed an additional $4,000 in principal under the Revolving Credit Facility. In February 2015, we repaid the entire outstanding balance of $36,000 using a portion of the proceeds we received from our IPO and, as of April 1, 2015, there were no amounts outstanding under the Revolving Credit Facility. We had $19,920 of availability as of April 1, 2015, after giving effect to $80 in outstanding letters of credit.
The Revolving Credit Facility is secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors. The obligations under the Revolving Credit Facility are guaranteed by each of SSE Holdings’ wholly-owned domestic subsidiaries (with certain exceptions).
The Revolving Credit Facility contains a number of covenants that, among other things, limit our ability to, subject to specified exceptions, incur additional debt; incur additional liens and contingent liabilities; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve ourselves; pay dividends or make distributions; engage in businesses that are not in a related line of business; make loans, advances or guarantees; engage in transactions with affiliates; and make investments. In addition, the Revolving Credit Facility contains certain cross-default provisions. We are required to maintain a specified consolidated fixed-charge coverage ratio and a specified funded net debt to adjusted EBITDA ratio, both as defined under the Revolving Credit Facility. As of April 1, 2015, we were in compliance with all covenants.
In March 2013, we entered into a promissory note in the amount of $313 in connection with the purchase of a liquor license. Interest on the outstanding principal balance of this note is due and payable on a monthly basis from the effective date at a rate of 5.0% per year. The entire principal balance and interest is due and payable on the earlier of the maturity date, which is the expiration of the lease in June 2023, or the date of the sale of the license. As of April 1, 2015 and December 31, 2014, the outstanding balance of the promissory note was $313.
Stockholders' Equity
Stockholders' Equity
STOCKHOLDERS' EQUITY
Amendment and Restatement of Certificate of Incorporation
On February 4, 2015, we amended and restated our certificate of incorporation to, among other things, provide for the (i) authorization of 200,000,000 shares of Class A common stock with a par value of $0.001 per share; (ii) authorization of 35,000,000 shares of Class B common stock with a par value of $0.001 per share; (iii) authorization of 10,000,000 shares of undesignated preferred stock that may be issued from time to time by our Board of Directors in one or more series; and (iv) establishment of a classified board of directors, divided into three classes, each of whose members will serve for staggered three-year terms.
Holders of our Class A and Class B common stock are entitled to one vote per share and, except as otherwise required, will vote together as a single class on all matters on which stockholders generally are entitled to vote. Holders of our Class B common stock are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of Class B common stock may only be issued to the extent necessary to maintain the one-to-one ratio between the number of LLC Interests held by the Continuing SSE Equity Owners and the number of shares of Class B common stock held by the Continuing SSE Equity Owners. Shares of Class B common stock are transferable only together with an equal number of LLC Interests. Shares of Class B common stock will be canceled on a one-for-one basis if we, at the election of a Continuing SSE Equity Owner, redeem or exchange any of the outstanding LLC Interests.
We must, at all times, maintain a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of LLC Interests owned by us (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities).
Initial Public Offering
As described in Note 1, on February 4, 2015, we completed an initial public offering ("IPO") of 5,750,000 shares of our Class A common stock at a public offering price of $21.00 per share, which includes 750,000 shares issued pursuant to the underwriters' over-allotment option. We received $112,298 in proceeds, net of underwriting discounts and commissions, which we used to purchase newly-issued membership interests from SSE Holdings at a price per interest equal to the initial public offering price of our Class A common stock.
In connection with IPO, we issued 30,160,694 shares of Class B common stock to the Original SSE Equity Owners.
SSE Holdings Recapitalization
As described in Note 1, on February 4, 2015, we amended the SSE Holdings LLC Agreement to, among other things, (i) provide for a new single class of common membership interests in SSE Holdings, the LLC Interests, and (ii) exchange all of the then-existing membership interests of the Original SSE Equity Owners for LLC Interests. Subsequent to the amendment and Organizational Transactions, 36,250,000 LLC Interests were outstanding, of which 33.3% were held by Shake Shack and the remaining 66.7% were held by the Continuing SSE Equity Owners.
The amendment also requires that SSE Holdings, at all times, maintain (i) a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of LLC Interests owned by us and (ii) a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing SSE Equity Owners and the number of LLC Interests owned by the Continuing SSE Equity Owners.
Member Distributions
On December 15, 2014, the Board of Directors of SSE Holdings approved a special distribution to its members, to the extent the gross proceeds from the IPO exceed the anticipated gross proceeds (including as a result of the exercise by the underwriters of their option to purchase additional shares of Class A common stock), in an amount equal to the product of (i) the increased gross proceeds and (ii) 0.273, to be paid from the proceeds of the IPO (the "Additional Distribution"). On February 4, 2015, SSE Holdings paid the Additional Distribution to certain of the Original SSE Equity Owners in the amount of $11,125.
Non-Controlling Interests
Non-Controlling Interests
NON-CONTROLLING INTERESTS
On February 4, 2015, we used the net proceeds from the IPO to purchase 5,750,000 newly-issued LLC Interests. Additionally, in connection with the Organizational Transactions, we acquired 5,968,841 LLC Interests. Pursuant to the LLC Agreement, we received 339,306 LLC Interests as a result of the issuance of 339,306 shares of Class A common stock in settlement of the outstanding UARs. As of April 1, 2015, we owned 33.3% of SSE Holdings.
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity:
 
 
Thirteen Weeks
Ended
April 1, 2015
Net loss attributable to Shake Shack Inc.
$
(12,668
)
Transfers to non-controlling interests
 

Increase in accumulated deficit as a result of the Organizational Transactions
(1,278
)
Change from net loss attributable to Shake Shack Inc. and transfers to non-controlling interest
$
(13,946
)
Equity-Based Compensation
Equity-Based compensation
EQUITY-BASED COMPENSATION
A summary of equity-based compensation expense recognized during the thirteen weeks ended April 1, 2015 and March 26, 2014 is as follows:
 
 
Thirteen Weeks Ended
 
 
April 1,
2015
 
March 26,
2014
Unit appreciation rights
$
11,762

 
$
—

Restricted Class B units
605

 
41

Stock options
792

 
—

Equity-based compensation expense
$
13,159

 
$
41


Amounts are included in general and administrative expense on the Condensed Consolidated Statements of Income (Loss). No income tax benefits were recognized related to equity-based compensation during the thirteen weeks ended April 1, 2015 and March 26, 2014.
Unit Appreciation Rights
Prior to the IPO, we maintained a Unit Appreciation Rights Plan (the "UAR Plan"), effective in fiscal year 2012, and as amended, whereby we had the authority to grant up to 31,303 unit appreciation rights ("UARs") to employees. The UARs granted were subject to continued employment and were only exercisable upon a qualifying transaction, which was either a change of control or an initial public offering, each as defined in the UAR Plan. Upon the occurrence of a qualifying transaction, each UAR entitled the holder to receive a payment from us with such payment, and related compensation expense, determined by multiplying (i) the excess, if any, of the qualifying transaction price over the base amount of the UAR, by (ii) the stated number of Class B units deemed covered by the UAR. Effective October 30, 2014, the UAR Plan was amended to provide that the payment to which UAR holders were entitled upon the occurrence of a qualifying transaction would be in the form of securities of the Company or one of its affiliates or such other form of payment as we determined in our sole discretion. The UARs would have terminated on the tenth anniversary of the grant date or upon termination of employment, if earlier.
A summary of UAR activity for the thirteen weeks ended April 1, 2015 is as follows:
 
 
UARs
 
Weighted
Average
Base
Price
Outstanding at beginning of period
22,554

 
$
193.51

 
Granted
—

 
—

 
Forfeited
—

 
—

 
Vested and settled
(22,554
)
 
$
(193.51
)
Outstanding at end of period
—

 
$
—


No compensation expense was recorded during the thirteen weeks ended March 26, 2014 related to the outstanding UARs as we determined that, as of the period end, it was not probable that a qualifying transaction would occur.
As described in Note 1, on February 4, 2015, we amended and restated the SSE Holdings LLC Agreement to, among other things, (i) provide for a new single class of common membership interests, the LLC Interests, and (ii) exchange all of the then-existing membership interests of the Original SSE Equity Owners for LLC Interests (together, the "Recapitalization Transaction"). The 22,554 outstanding UARs that were settled in connection with the IPO equate to 767,947 LLC Interests with a weighted average base price of $5.68, after giving effect to the Recapitalization Transaction.
Our IPO constitutes a qualifying transaction under the terms of the UAR Plan, resulting in a qualifying transaction price of $715.02. 339,306 shares of Class A common stock were issued upon the settlement of the 22,554 outstanding UARs, net of employee withholding taxes. We recognized compensation expense of $11,762 during the thirteen weeks ended April 1, 2015 upon settlement of the outstanding UARs.
Restricted Class B Units
Prior to the IPO, we granted restricted Class B units to certain of our executive officers. These awards were to vest in equal installments over periods ranging from three to five years. If not already fully vested, these units would fully vest (i) upon the occurrence of a change in control event or (ii) upon the occurrence of an initial public offering, each as defined in the grant agreement, and any unrecognized compensation expense related to these non-vested units would be subject to acceleration.
A summary of restricted Class B unit activity for thirteen weeks ended April 1, 2015 is as follows:
 
 
Units
 
Weighted
Average
Grant Date
Fair Value
Outstanding at beginning of period
7,227

 
$
92.31

 
Granted
—

 
—

 
Vested
(7,227
)
 
(92.31
)
 
Forfeited
—

 
—

Outstanding at end of period
—

 
$
—


The IPO constitutes a transaction under the terms of the restricted Class B unit awards that resulted in the accelerated vesting of all then-outstanding awards, and recognition of the unrecognized compensation expense related to those awards. During the thirteen weeks ended April 1, 2015, we recognized $605 of equity-based compensation expense upon the vesting of these awards. The total fair value of restricted Class B units that vested during the thirteen weeks ended April 1, 2015 was $667. After giving effect to the Recapitalization Transaction, the 7,227 restricted Class B units that vested during the period equate to 158,251 LLC Interests with a weighted-average grant date fair value of $4.22.
Stock Options
In January 2015, we adopted the 2015 Incentive Award Plan (the "2015 Plan") under which we may grant up to 5,865,522 stock options and other equity-based awards to employees, directors and officers. In connection with the IPO, we granted 2,622,281 stock options to our directors and certain employees. The stock options were granted with an exercise price of $21.00 per share and vest equally over periods ranging from one to five years.
The fair value of stock option awards was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:
 
Thirteen Weeks
Ended
April 1, 2015
Expected term (years)(1)
7.5

Expected volatility(2)
35.1
%
Risk-free interest rate(3)
1.6
%
Dividend yield(4)
—
%
 
 
(1)
Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)
Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)
The risk-free rate rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)
We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.


A summary of stock option activity for thirteen weeks ended April 1, 2015 is as follows:
 
 
Stock
Options
 
Weighted
Average
Exercise
Price
Outstanding at beginning of period
—

 
$
—

 
Granted
2,622,281

 
21.00

 
Exercised
—

 
—

 
Forfeited
(4,000
)
 
(21.00
)
Outstanding at end of period
2,618,281

 
$
21.00


The weighted-average grant date fair value of stock options granted during the thirteen weeks ended April 1, 2015 was $8.53. As of April 1, 2015, there were 2,618,281 stock option outstanding, of which none were exercisable. As of April 1, 2015, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $21,364, which is expected to be recognized over a weighted-average period of 4.8 years.
Income Taxes
Income Taxes
INCOME TAXES
As a result of the IPO and Organizational Transactions, we became the sole managing member of SSE Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, SSE Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by SSE Holdings is passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis. We are subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of SSE Holdings. We are also subject to withholding taxes in foreign jurisdictions.
A reconciliation of income tax expense computed at the U.S. federal statutory income tax rate to the income tax expense recognized is as follows:
 
 
Thirteen Weeks Ended
 
 
April 1,
2015
 
March 26,
2014
Income (loss) before income taxes
$
(11,027
)
 
$
1,194

Less: net loss prior to the Organizational Transactions
13,049

 
—

Less: net income attributable to non-controlling interests
(1,408
)
 
—

 
Income attributable to Shake Shack Inc. before income taxes
614

 
1,194

 
 
 
 
 
Income taxes at U.S. federal statutory rate
215

 
418

State and local income taxes, net of federal benefit
(85
)
 
32

Foreign withholding taxes
75

 
70

Non-deductible expenses
28

 
—

LLC flow-through structure
—

 
(418
)
Income tax expense
$
233

 
$
102


Pro Forma Financial Information
For periods prior to the IPO and Organizational Transactions, our income taxes represent those of SSE Holdings, our predecessor, and relate solely to foreign withholding taxes and certain LLC entity-level taxes. As a result of the IPO and Organizational Transactions that occurred on February 4, 2015, we are subject to U.S. federal and certain state and local income taxes with respect to our allocable share of any taxable income or loss generated by SSE Holdings. The pro forma financial information presented on the Condensed Consolidated Statements of Income (Loss) for the thirteen weeks ended April 1, 2015 has been computed to reflect a benefit from income taxes at an effective tax rate of 13.7%. The amounts were calculated assuming the Organizational Transactions occurred on January 1, 2015 and were based on the statutory rates in effect during the period.
Tax Receivable Agreement
We expect to obtain an increase in our share of the tax basis of the assets of SSE Holdings when LLC Interests are redeemed or exchanged by the Continuing SSE Equity Owners and other qualifying transactions. This increase in tax basis may have the effect of reducing the amounts that we would otherwise pay in the future to various tax authorities. The increase in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
On February 4, 2015, we entered into a tax receivable agreement with the Continuing SSE Equity Owners (the "Tax Receivable Agreement") that provides for the payment by us to the Continuing SSE Equity Owners of 85% of the amount of tax benefits, if any, that Shake Shack actually realizes as a result of (i) increases in the tax basis of assets of SSE Holdings resulting from any redemptions or exchanges of LLC Interests or any prior sales of interests in SSE Holdings and (ii) certain other tax benefits related to our making payments under the Tax Receivable Agreement.
During the thirteen weeks ended April 1, 2015, SSE Holdings paid a distribution in the amount of $11,125 to certain of the Original SSE Equity Owners. This distribution triggered an increase in the tax basis of SSE Holdings subject to the provisions of the Tax Receivable Agreement. We recognized a deferred tax asset in the amount of $6,006 and a corresponding liability of $5,105, representing 85% of the tax benefits due to the Continuing SSE Equity Owners.
Earnings Per Share
Earnings Per Share
EARNINGS PER SHARE
Basic earnings per share of Class A common stock is computed by dividing net income available to Shake Shack Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to Shake Shack Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.
As described in Note 1, on February 4, 2015, the SSE Holdings LLC Agreement was amended and restated to, among other things, (i) provide for a new single class of common membership interests, the LLC Interests, and (ii) exchange all of the then-existing membership interests of the Original SSE Equity Owners for LLC Interests. For purposes of calculating earnings per share, the prior period amounts have been retroactively adjusted to give effect to the above-mentioned amendment and resulting recapitalization. The computation does not consider the 5,750,000 shares of Class A common stock issued to investors in our IPO or the 339,306 shares of Class A common stock issued upon settlement of outstanding UARs in connection with the IPO.
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the thirteen weeks ended April 1, 2015 and March 26, 2014.
 
 
 
Thirteen Weeks Ended
 
 
 
April 1,
2015
 
March 26,
2014
Numerator:
 
 
 
 
Net income (loss)
$
(11,260
)
 
$
1,092

 
Less: net income attributable to non-controlling interests
(1,408
)
 
—

 
Net income (loss) attributable to Shake Shack Inc.
$
(12,668
)
 
$
1,092

Denominator:
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
11,953

 
29,963

 
Effect of dilutive securities:
 
 
 
 
 
Restricted Class B units
—

 
162

 
Weighted-average shares of Class A common stock outstanding—diluted
11,953

 
30,125

 
 
 
 
 
 
Earnings per share of Class A common stock—basic
$
(1.06
)
 
$
0.04

Earnings per share of Class A common stock—diluted
$
(1.06
)
 
$
0.04


2,618,281 stock options were excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive as we recorded a net loss for the period.
Shares of our Class B common stock do not share in the earnings or losses of Shake Shack and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of our Class B common stock are, however, considered potentially dilutive shares of Class A common stock. After evaluating the potential dilutive effect under the if-converted and two-class methods, the 24,191,853 shares of Class B common stock outstanding as of April 1, 2015 were determined to be anti-dilutive and have therefore been excluded from the computation of diluted earnings per share of Class A common stock.
Supplemental Cash Flow Information
Supplemental Cash Flow Information
SUPPLEMENTAL CASH FLOW INFORMATION
The following table sets forth supplemental cash flow information for the thirteen weeks ended April 1, 2015 and March 26, 2014:
 
 
Thirteen Weeks Ended
 
 
April 1,
2015
 
March 26,
2014
Cash paid for:
 
 
 
 
Income taxes, net of refunds
$
49

 
$
355

 
Interest
149

 
22

Non-cash investing activities:
 
 
 
 
Accrued purchases of property and equipment
3,088

 
909

 
Class A common stock issued connection with the acquisition of the Former SSE Equity Owners
6

 
—

Non-cash financing activities:
 
 
 
 
Cancellation of Class B common stock in connection with the Organizational Transactions
(6
)
 
—

Commitments and Contingencies
Commitments and contingencies
COMMITMENTS AND CONTINGENCIES
Lease Commitments
We are obligated under various operating leases for Shacks and our home office space, expiring in various years through 2031. Under certain of these leases, we are liable for contingent rent based on a percentage of sales in excess of a specified threshold and are responsible for our proportionate share of real estate taxes and utilities.
As security under the terms of several of our leases, we are obligated under letters of credit totaling $160 as of April 1, 2015. The letters of credit expire on April 23, 2016 and February 28, 2026. In addition, in December 2013, we entered into an irrevocable standby letter of credit in conjunction with our home office lease in the amount of $80. The letter of credit expires in September 2015 and renews automatically for one-year periods through September 30, 2019.
Purchase Commitments
Purchase obligations include legally binding contracts, including commitments for the purchase, construction or remodeling of real estate and facilities, firm minimum commitments for inventory purchases, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts. These obligations are generally short-term in nature and are recorded as liabilities when the related goods are received or services rendered. We also enter into long-term, exclusive contracts with certain vendors to supply us with food, beverages and paper goods, obligating us to purchase specified quantities. These volume commitments are not subject to any time limit and there are no material financial penalties associated with these agreements in the event of early termination.
Legal Contingencies
We are subject to various legal proceedings, claims and liabilities, such as employment-related claims and slip and fall cases, which arise in the ordinary course of business and are generally covered by insurance. As of April 1, 2015, the amount of ultimate liability with respect to these matters was not material.
Related Party Transactions
Related Party Transactions
RELATED PARTY TRANSACTIONS
Union Square Hospitality Group
Union Square Hospitality Group, LLC and its subsidiaries ("USHG") is considered a related party under common control, to which we paid management fees, health costs and amounts advanced for other general operating expenses during the period. The amounts are temporary and non-interest bearing in nature.
Under the terms of the management agreement with USHG, as amended, in fiscal 2014, we paid a 2.5% management fee to USHG based on Shack sales and licensing income generated from license agreements with unaffiliated entities. Total management fees, which are included in general and administrative expenses, amounted to $592 for the thirteen weeks ended March 26, 2014. Effective January 1, 2015, the management agreement was amended and restated. As a result, we are no longer obligated to pay management fees to USHG. Therefore, no management fees were paid to USHG for the thirteen weeks ended April 1, 2015.
Previously, we sub-leased office space from USHG on a month-to-month basis. Amounts paid to USHG as rent totaled $42 for the thirteen weeks ended March 26, 2014. This amount is included in general and administrative expense on the Condensed Consolidated Statements of Income (Loss).
Previously, our employees were included in USHG's self-insurance health plan and we paid our portion of the plan costs on a monthly basis to USHG. In February 2015, we established our own self-funded health insurance plan for our employees and ceased payments to USHG. Amounts paid to the USHG for these health insurance costs were $151 and $313 for the thirteen weeks ended April 1, 2015 and March 26, 2014, respectively. These amounts are included in labor and related expenses and general and administrative expenses on the Condensed Consolidated Statements of Income (Loss). Additionally, our employees are eligible participants under USHG's 401(k) plan. We pay our share of the employer's matching contributions directly to the third-party plan trustee.
Total amounts payable to the USHG as of April 1, 2015 and December 31, 2014 were $39 and $238, respectively.
Hudson Yards Sports and Entertainment
In fiscal 2011, we entered into a Master License Agreement (an "MLA") with Hudson Yards Sports and Entertainment LLC ("HYSE"), a subsidiary of USHG and a related party, to operate Shake Shack branded limited menu concession stands in certain sports and entertainment venues within the United States. The agreement expires on December 31, 2027 and includes five consecutive five-year renewal options at HYSE's option. As consideration for these rights, HYSE pays us a license fee based on a percentage of net food sales, as defined in the MLA. HYSE also pays us a percentage of profits on sales of branded beverages, as defined in the MLA. No amounts were paid to us by HYSE for the thirteen weeks ended April 1, 2015 and March 26, 2014 as the concession stands operate on a seasonal basis and were closed during the period.
Madison Square Park Conservancy
The Chairman of our Board of Directors is a director of the Madison Square Park Conservancy, with which we have a license agreement and pay license fees to operate our Madison Square Park Shack. Amounts paid to Madison Square Park Conservancy as rent amounted to $97 for the thirteen weeks ended March 26, 2014. No amounts were paid for the thirteen weeks ended April 1, 2015 as our Madison Square Park location was closed for renovations. These amounts are included in occupancy and related expenses on the Condensed Consolidated Statements of Income (Loss).
Summary of Significant Accounting Policies (Policies)
Basis of presentation 
The accompanying unaudited condensed consolidated financial statements include the accounts of Shake Shack Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on a basis consistent in all material respects with the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. In our opinion, all adjustments necessary for a fair presentation of our financial position and results of operation have been included. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
The accompanying Condensed Consolidated Balance Sheet as of December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
We do not have any components of other comprehensive income recorded within our condensed consolidated financial statements, and, therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements.
Fiscal year 
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal 2015 contains 52 weeks and ends on December 30, 2015. Fiscal 2014 contained 53 weeks and ended on December 31, 2014. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of estimates 
The preparation of these condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
Recently issued accounting pronouncements 
In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-05, Customers' Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"). ASU 2015-05 provides guidance in evaluating whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the software license element of the arrangement should be accounted for as an acquisition of a software license. If the arrangement does not contain a software license, it should be accounted for as a service contract. ASU 2015-05 is effective for reporting periods beginning after December 15, 2015 and may be adopted either retrospectively or prospectively. We are currently evaluating the impact ASU 2015-05 will have on our consolidated financial statements.
In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. ASU 2015-03 is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2015-03 is not expected to have a material effect our consolidated financial position, results of operations or cash flows.
In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation ("ASU 2015-02"). ASU 2015-02 amends the existing guidance to: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (ii) eliminate the presumption that a general partner should consolidate a limited partnership; (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. ASU 2015-02 is effective for reporting periods beginning after December 15, 2015. We are currently evaluating the impact ASU 2015-02 will have on our consolidated financial statements.
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes the existing revenue recognition guidance and clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 is effective, on a retrospective basis, for reporting periods beginning after December 15, 2016. Early adoption is permitted, subject to certain conditions. We are currently evaluating the impact ASU 2014-09 will have on our consolidated financial position, results of operations and cash flows.
Inventories (Tables)
Inventories
Inventories as of April 1, 2015 and December 31, 2014 consisted of the following:
 
April 1,
2015
 
December 31,
2014
Food
$
233

 
$
354

Wine
29

 
28

Beer
31

 
33

Beverages
38

 
42

Retail merchandise
73

 
72

Inventories
$
404

 
$
529

Supplemental Balance Sheet Information (Tables)
Supplemental Balance Sheet Information
The components of other current liabilities as of April 1, 2015 and December 31, 2014 are as follows:
 
April 1,
2015
 
December 31,
2014
Sales tax payable
$
1,005

 
$
736

Gift card liability
578

 
625

Other
684

 
388

Other current liabilities
$
2,267

 
$
1,749

The components of other long-term liabilities as of April 1, 2015 and December 31, 2014 are as follows:
 
April 1,
2015
 
December 31,
2014
Deferred compensation
$
2,163

 
$
2,141

Liability under tax receivable agreement
5,054

 
—

Other
1,676

 
1,878

Other long-term liabilities
$
8,893

 
$
4,019

Non-Controlling Interests (Tables)
Schedule of non-controlling interest
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity:
 
 
Thirteen Weeks
Ended
April 1, 2015
Net loss attributable to Shake Shack Inc.
$
(12,668
)
Transfers to non-controlling interests
 

Increase in accumulated deficit as a result of the Organizational Transactions
(1,278
)
Change from net loss attributable to Shake Shack Inc. and transfers to non-controlling interest
$
(13,946
)
Equity-Based Compensation (Tables)
Schedule of equity-based compensation expense recognized 
A summary of equity-based compensation expense recognized during the thirteen weeks ended April 1, 2015 and March 26, 2014 is as follows:
 
 
Thirteen Weeks Ended
 
 
April 1,
2015
 
March 26,
2014
Unit appreciation rights
$
11,762

 
$
—

Restricted Class B units
605

 
41

Stock options
792

 
—

Equity-based compensation expense
$
13,159

 
$
41

Schedule of unit appreciation rights activity 
A summary of UAR activity for the thirteen weeks ended April 1, 2015 is as follows:
 
 
UARs
 
Weighted
Average
Base
Price
Outstanding at beginning of period
22,554

 
$
193.51

 
Granted
—

 
—

 
Forfeited
—

 
—

 
Vested and settled
(22,554
)
 
$
(193.51
)
Outstanding at end of period
—

 
$
—

Schedule of restricted class B activity 
A summary of restricted Class B unit activity for thirteen weeks ended April 1, 2015 is as follows:
 
 
Units
 
Weighted
Average
Grant Date
Fair Value
Outstanding at beginning of period
7,227

 
$
92.31

 
Granted
—

 
—

 
Vested
(7,227
)
 
(92.31
)
 
Forfeited
—

 
—

Outstanding at end of period
—

 
$
—

Schedule of fair value of stock options 
The fair value of stock option awards was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:
 
Thirteen Weeks
Ended
April 1, 2015
Expected term (years)(1)
7.5

Expected volatility(2)
35.1
%
Risk-free interest rate(3)
1.6
%
Dividend yield(4)
—
%
 
 
(1)
Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)
Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)
The risk-free rate rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)
We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.

Schedule of stock options, activity 
A summary of stock option activity for thirteen weeks ended April 1, 2015 is as follows:
 
 
Stock
Options
 
Weighted
Average
Exercise
Price
Outstanding at beginning of period
—

 
$
—

 
Granted
2,622,281

 
21.00

 
Exercised
—

 
—

 
Forfeited
(4,000
)
 
(21.00
)
Outstanding at end of period
2,618,281

 
$
21.00

Income Taxes (Tables)
Reconciliation of income tax expense, US income tax rate
A reconciliation of income tax expense computed at the U.S. federal statutory income tax rate to the income tax expense recognized is as follows:
 
 
Thirteen Weeks Ended
 
 
April 1,
2015
 
March 26,
2014
Income (loss) before income taxes
$
(11,027
)
 
$
1,194

Less: net loss prior to the Organizational Transactions
13,049

 
—

Less: net income attributable to non-controlling interests
(1,408
)
 
—

 
Income attributable to Shake Shack Inc. before income taxes
614

 
1,194

 
 
 
 
 
Income taxes at U.S. federal statutory rate
215

 
418

State and local income taxes, net of federal benefit
(85
)
 
32

Foreign withholding taxes
75

 
70

Non-deductible expenses
28

 
—

LLC flow-through structure
—

 
(418
)
Income tax expense
$
233

 
$
102

Earnings Per Share (Tables)
Schedule of earnings per share
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the thirteen weeks ended April 1, 2015 and March 26, 2014.
 
 
 
Thirteen Weeks Ended
 
 
 
April 1,
2015
 
March 26,
2014
Numerator:
 
 
 
 
Net income (loss)
$
(11,260
)
 
$
1,092

 
Less: net income attributable to non-controlling interests
(1,408
)
 
—

 
Net income (loss) attributable to Shake Shack Inc.
$
(12,668
)
 
$
1,092

Denominator:
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
11,953

 
29,963

 
Effect of dilutive securities:
 
 
 
 
 
Restricted Class B units
—

 
162

 
Weighted-average shares of Class A common stock outstanding—diluted
11,953

 
30,125

 
 
 
 
 
 
Earnings per share of Class A common stock—basic
$
(1.06
)
 
$
0.04

Earnings per share of Class A common stock—diluted
$
(1.06
)
 
$
0.04

Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow Information
The following table sets forth supplemental cash flow information for the thirteen weeks ended April 1, 2015 and March 26, 2014:
 
 
Thirteen Weeks Ended
 
 
April 1,
2015
 
March 26,
2014
Cash paid for:
 
 
 
 
Income taxes, net of refunds
$
49

 
$
355

 
Interest
149

 
22

Non-cash investing activities:
 
 
 
 
Accrued purchases of property and equipment
3,088

 
909

 
Class A common stock issued connection with the acquisition of the Former SSE Equity Owners
6

 
—

Non-cash financing activities:
 
 
 
 
Cancellation of Class B common stock in connection with the Organizational Transactions
(6
)
 
—

Organization - Franchiser (Details)
Apr. 1, 2015
Restaurant
Franchisor Disclosure [Line Items]
 
Number of restaurants
66 
Company-operated |
United States
 
Franchisor Disclosure [Line Items]
 
Number of restaurants
34 
Licensed |
United States
 
Franchisor Disclosure [Line Items]
 
Number of restaurants
5 
Licensed |
Non-United States
 
Franchisor Disclosure [Line Items]
 
Number of restaurants
27 
Organization - Initial Public Offering (Details) (Common stock, Class A common stock, USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 2 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended
Feb. 4, 2015
Apr. 1, 2015
Feb. 4, 2015
Initial public offering
Apr. 1, 2015
Initial public offering
Feb. 4, 2015
Initial public offering
Feb. 4, 2015
Over-allotment option
Class of Stock [Line Items]
 
 
 
 
 
 
Shares issued during the period
5,968,841 
5,750,000 
5,750,000 
5,750,000 
 
750,000 
Proceeds of issuance of initial public offering net of underwriting discounts and commissions
 
 
$ 112,298 
 
 
 
Shares issued, share price
 
 
 
 
$ 21 
 
Organization - Organizational Transactions (Details)
0 Months Ended 2 Months Ended
Feb. 4, 2015
Apr. 1, 2015
Class of Stock [Line Items]
 
 
Number of entities acquired
2 
 
Number of LLC interests
5,968,841 
 
Ownership percent of noncontrolling interest
 
33.30% 
Class A common stock
 
 
Class of Stock [Line Items]
 
 
Ratio of common stock to limited liability company interest
1 
 
Class A common stock |
Common stock
 
 
Class of Stock [Line Items]
 
 
Shares issued during the period
5,968,841 
5,750,000 
Class B common stock
 
 
Class of Stock [Line Items]
 
 
Ratio of common stock to limited liability company interest
1 
 
Class B common stock |
Common stock
 
 
Class of Stock [Line Items]
 
 
Shares issued during the period
30,160,694 
 
Shares cancelled during the period
5,968,841 
 
Summary of Significant Accounting Policies (Details)
3 Months Ended 12 Months Ended
Apr. 1, 2015
Dec. 31, 2014
Accounting Policies [Abstract]
 
 
Fiscal period duration
364 days 
371 days 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 1, 2015
Dec. 31, 2014
Inventory [Line Items]
 
 
Inventories
$ 404 
$ 529 
Food
 
 
Inventory [Line Items]
 
 
Inventories
233 
354 
Wine
 
 
Inventory [Line Items]
 
 
Inventories
29 
28 
Beer
 
 
Inventory [Line Items]
 
 
Inventories
31 
33 
Beverages
 
 
Inventory [Line Items]
 
 
Inventories
38 
42 
Retail merchandise
 
 
Inventory [Line Items]
 
 
Inventories
$ 73 
$ 72 
Supplemental Balance Sheet Information - (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 1, 2015
Dec. 31, 2014
Other Liabilities, Current
 
 
Sales tax payable
$ 1,005 
$ 736 
Gift card liability
578 
625 
Other
684 
388 
Other current liabilities
2,267 
1,749 
Other Liabilities, Noncurrent
 
 
Deferred compensation
2,163 
2,141 
Liability under tax receivable agreement
5,054 
0 
Other
1,676 
1,878 
Other long-term liabilities
$ 8,893 
$ 4,019 
Debt (Details) (USD $)
3 Months Ended 3 Months Ended 0 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended
Apr. 1, 2015
Mar. 26, 2014
Dec. 31, 2014
Apr. 1, 2015
Notes payable
Dec. 31, 2014
Notes payable
Mar. 31, 2013
Notes payable
Apr. 1, 2015
Letter of credit
Feb. 4, 2015
Revolving Credit Facility
Line of credit
Feb. 28, 2015
Revolving Credit Facility
Line of credit
Apr. 1, 2015
Revolving Credit Facility
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Line of credit
Dec. 31, 2014
Revolving Credit Facility
Line of credit
Apr. 1, 2015
Revolving Credit Facility
Letter of credit
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Letter of credit
Line of credit
Apr. 1, 2015
Revolving Credit Facility
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Minimum
Line of credit
London Interbank Offered Rate (LIBOR)
Feb. 4, 2015
Revolving Credit Facility
Minimum
Line of credit
Prime rate
Feb. 4, 2015
Revolving Credit Facility
Maximum
Line of credit
London Interbank Offered Rate (LIBOR)
Feb. 4, 2015
Revolving Credit Facility
Maximum
Line of credit
Prime rate
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
$ 50,000,000 
 
 
$ 10,000,000 
 
 
 
 
 
Current borrowing capacity
 
 
 
 
 
 
 
 
 
 
20,000,000 
 
80,000 
 
19,920,000 
 
 
 
 
Term to maturity
 
 
 
 
 
 
1 year 
5 years 
 
 
 
 
 
 
 
 
 
 
 
Basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
0.00% 
3.50% 
1.00% 
Short-term borrowings
0 
 
32,000,000 
 
 
 
 
 
 
0 
 
32,000,000 
 
 
 
 
 
 
 
Proceeds from revolving credit facility
4,000,000 
0 
 
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
Payments on revolving credit facility
36,000,000 
0 
 
 
 
 
 
 
36,000,000 
 
 
 
 
 
 
 
 
 
 
Notes payable face amount
 
 
 
 
 
313,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stated interest rate
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable
$ 313,000 
 
$ 313,000 
$ 313,000 
$ 313,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 2 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended
Feb. 4, 2015
board_of_director_class
Vote
Dec. 15, 2014
Apr. 1, 2015
Mar. 26, 2014
Feb. 4, 2015
Dec. 31, 2014
Feb. 4, 2015
Class A common stock
Apr. 1, 2015
Class A common stock
Feb. 4, 2015
Class A common stock
Feb. 4, 2015
Class B common stock
Apr. 1, 2015
Class B common stock
Feb. 4, 2015
Class B common stock
Feb. 4, 2015
Common stock
Class A common stock
Apr. 1, 2015
Common stock
Class A common stock
Feb. 4, 2015
Common stock
Class B common stock
Feb. 4, 2015
Common stock
Initial public offering
Class A common stock
Apr. 1, 2015
Common stock
Initial public offering
Class A common stock
Feb. 4, 2015
Common stock
Initial public offering
Class A common stock
Feb. 4, 2015
Common stock
Over-allotment option
Class A common stock
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock, shares authorized
 
 
 
 
 
100 
 
200,000,000 
200,000,000 
 
35,000,000 
35,000,000 
 
 
 
 
 
 
 
Common stock par value (in usd per share)
 
 
 
 
 
$ 0.01 
 
$ 0.001 
$ 0.001 
 
$ 0.001 
$ 0.001 
 
 
 
 
 
 
 
Preferred stock, shares authorized
 
 
10,000,000 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Classes of Directors
3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Board of Directors, Term
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Votes per Share
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of common stock to limited liability company interest
 
 
 
 
 
 
1 
 
 
1 
 
 
 
 
 
 
 
 
 
Shares issued during the period
 
 
 
 
 
 
 
 
 
 
 
 
5,968,841 
5,750,000 
30,160,694 
5,750,000 
5,750,000 
 
750,000 
Shares issued, share price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21 
 
Proceeds of issuance of initial public offering net of underwriting discounts and commissions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 112,298 
 
 
 
Limited liability company interests outstanding
 
 
 
 
36,250,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership percent of noncontrolling interest
 
 
33.30% 
 
33.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling owners ownership percentage
 
 
 
 
66.70% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Member distribution threshold, percentage
 
27.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Member distributions
$ 11,125 
 
$ 11,125 
$ 2,094 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Controlling Interests (Narrative) (Details)
0 Months Ended 2 Months Ended 3 Months Ended
Feb. 4, 2015
Apr. 1, 2015
Apr. 1, 2015
Noncontrolling Interest [Line Items]
 
 
 
Number of LLC interests
5,968,841 
 
 
LLC interests issued for share-based compensation
339,306 
 
 
Ownership percent of noncontrolling interest
 
33.30% 
33.30% 
Class A common stock |
Common stock
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
Shares issued during the period
5,968,841 
5,750,000 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
339,306 
339,306 
339,306 
Initial public offering |
Class A common stock |
Common stock
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
Shares issued during the period
5,750,000 
 
5,750,000 
Non-Controlling Interests - Schedule of non-controlling interest (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 1, 2015
Mar. 26, 2014
Noncontrolling Interest [Abstract]
 
 
Net loss attributable to Shake Shack Inc.
$ (12,668)
$ 1,092 
Increase in accumulated deficit as a result of the Organizational Transactions
(1,278)
 
Change from net loss attributable to Shake Shack Inc. and transfers to non-controlling interest
$ (13,946)
 
Equity-Based Compensation - Schedule of compensation expense recognized (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 1, 2015
Mar. 26, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Equity-based compensation expense
$ 13,159 
$ 41 
Unit appreciation rights
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Equity-based compensation expense
11,762 
0 
Restricted Class B units
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Equity-based compensation expense
605 
41 
Stock options
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Equity-based compensation expense
$ 792 
$ 0 
Equity-Based Compensation (Narrative) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 1 Months Ended 0 Months Ended 2 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
Apr. 1, 2015
Mar. 26, 2014
Apr. 1, 2015
LLC interests
Apr. 1, 2015
Unit appreciation rights
Mar. 26, 2014
Unit appreciation rights
Apr. 1, 2015
Restricted Class B units
Mar. 26, 2014
Restricted Class B units
Apr. 1, 2015
Stock options
Mar. 26, 2014
Stock options
Feb. 3, 2015
Minimum
Restricted Class B units
Feb. 3, 2015
Maximum
Restricted Class B units
Feb. 4, 2015
Common stock
Class A common stock
Apr. 1, 2015
Common stock
Class A common stock
Apr. 1, 2015
Common stock
Class A common stock
Apr. 1, 2015
Pro forma
LLC interests
Feb. 3, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Apr. 1, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Apr. 1, 2015
Unit Appreciation Rights Plan
Pro forma
LLC interests
Apr. 1, 2015
2015 Incentive Award Plan
Dec. 31, 2014
2015 Incentive Award Plan
Apr. 1, 2015
2015 Incentive Award Plan
Stock options
Jan. 1, 2015
2015 Incentive Award Plan
Stock options
Apr. 1, 2015
2015 Incentive Award Plan
Minimum
Stock options
Apr. 1, 2015
2015 Incentive Award Plan
Maximum
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares available for grant
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31,303 
 
 
 
 
 
5,865,522 
 
 
Contractual term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
 
 
 
 
 
 
 
 
Unit appreciation rights vested and settled
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,554 
767,947 
 
 
 
 
 
 
Weighted average base price of unit appreciation rights vested and settled
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 193.51 
$ 5.68 
 
 
 
 
 
 
IPO qualifying transaction price (in USD per share)
 
 
$ 715.02 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
 
 
 
 
 
 
 
 
 
 
 
339,306 
339,306 
339,306 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation expense
$ 13,159 
$ 41 
 
$ 11,762 
$ 0 
$ 605 
$ 41 
$ 792 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Award vesting period
 
 
 
 
 
 
 
 
 
3 years 
5 years 
 
 
 
 
 
 
 
 
 
 
 
1 year 
5 years 
Restricted class B units vested
 
 
 
 
 
7,227 
 
 
 
 
 
 
 
 
158,251 
 
 
 
 
 
 
 
 
 
Restricted class B units weighted average grant date fair value vested (in USD per share)
 
 
 
 
 
$ 92.31 
 
 
 
 
 
 
 
 
$ 4.22 
 
 
 
 
 
 
 
 
 
Fair value of restricted Class B units vested in the period
 
 
 
 
 
667 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options granted in the period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,622,281 
 
 
 
 
 
Weighted average exercise price for stock options granted (in USD per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21.00 
 
 
 
 
 
Weighted average grant date fair value of stock options (in USD per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 8.53 
 
 
 
 
 
Stock options outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,618,281 
0 
 
 
 
 
Stock options exercisable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
Unrecognized compensation expense (USD)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21,364 
 
 
 
 
 
Weighted-average period for recognition compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 years 10 months 
 
 
 
Equity-Based Compensation - Schedule of Unit Appreciation Rights (Details) (Unit Appreciation Rights Plan, Unit appreciation rights vested and settled, USD $)
3 Months Ended
Apr. 1, 2015
Unit Appreciation Rights Plan |
Unit appreciation rights vested and settled
 
UARs
 
Outstanding at beginning of period
22,554 
Granted
0 
Forfeited
0 
Vested and settled
(22,554)
Outstanding at end of period
0 
Weighted Average Base Price
 
Outstanding at beginning of period
$ 193.51 
Granted
$ 0.00 
Forfeited
$ 0.00 
Vested and settled
$ (193.51)
Outstanding at end of period
$ 0.00 
Equity-Based Compensation - Schedule of Restricted Class B Stock (Details) (Restricted Class B units, USD $)
3 Months Ended
Apr. 1, 2015
Apr. 1, 2015
Restricted Class B units
 
 
Units
 
 
Outstanding at beginning of period
7,227 
0 
Granted
0 
 
Vested
(7,227)
 
Forfeited
0 
 
Outstanding at end of period
$ 0.00 
 
Weighted Average Grant Date Fair Value
 
 
Outstanding at beginning of period
$ 92.31 
 
Granted
$ 0.00 
 
Vested
$ (92.31)
 
Forfeited
$ 0.00 
 
Outstanding at end of period
$ 0.00 
 
Equity-Based Compensation - Schedule of Fair Value of Stock Options (Details) (2015 Incentive Award Plan)
3 Months Ended
Apr. 1, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Dividend yield
0.00% 
Stock options
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Expected term (years)
7 years 6 months 
Expected volatility
35.10% 
Risk-free interest rate
1.60% 
Dividend yield
0.00% 
Equity-Based Compensation - Schedule of Stock Options (Details) (2015 Incentive Award Plan, USD $)
3 Months Ended
Apr. 1, 2015
2015 Incentive Award Plan
 
Stock Options
 
Outstanding at beginning of period
0 
Granted
2,622,281 
Exercised
0 
Forfeited
(4,000)
Outstanding at end of period
2,618,281 
Weighted Average Exercise Price
 
Outstanding at beginning of period
$ 0.00 
Granted
$ 21.00 
Exercised
$ 0.00 
Forfeited
$ (21.00)
Outstanding at end of period
$ 21.00 
Income Taxes - Reconciliation of income tax expense (Details) (USD $)
In Thousands, unless otherwise specified
1 Months Ended 2 Months Ended 3 Months Ended
Feb. 3, 2015
Apr. 1, 2015
Apr. 1, 2014
Apr. 1, 2015
Mar. 26, 2014
Income Tax Disclosure [Abstract]
 
 
 
 
 
Income (loss) before income taxes
 
 
 
$ (11,027)
$ 1,194 
Less: net loss prior to the Organizational Transactions
13,049 
(1,789)
 
11,260 
(1,092)
Less: net income attributable to non-controlling interests
 
 
(1,408)
(1,408)
0 
Income attributable to Shake Shack Inc. before income taxes
 
 
 
614 
1,194 
Income taxes at U.S. federal statutory rate
 
 
 
215 
418 
State and local income taxes, net of federal benefit
 
 
 
(85)
32 
Foreign withholding taxes
 
 
 
75 
70 
Non-deductible expenses
 
 
 
28 
0 
LLC flow-through structure
 
 
 
0 
(418)
Income tax expense
 
 
 
$ 233 
$ 102 
Income Taxes (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 3 Months Ended
Feb. 4, 2015
Apr. 1, 2015
Mar. 26, 2014
Feb. 4, 2015
Income Tax Contingency [Line Items]
 
 
 
 
Percentage of tax benefits due to equity owners
 
 
 
85.00% 
Member distributions
$ 11,125 
$ 11,125 
$ 2,094 
 
Deferred tax asset, tax receivable agreement
 
6,006 
 
 
Tax receivable agreement liability
 
$ 5,105 
 
 
Pro forma
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
Effective income tax rate, percent
 
13.70% 
 
 
Earnings Per Share - Schedule of Earnings Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
1 Months Ended 2 Months Ended 3 Months Ended
Feb. 3, 2015
Apr. 1, 2015
Apr. 1, 2014
Apr. 1, 2015
Mar. 26, 2014
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
Net income (loss)
$ (13,049)
$ 1,789 
 
$ (11,260)
$ 1,092 
Less: net income attributable to non-controlling interests
 
 
(1,408)
(1,408)
0 
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
 
 
 
$ (12,668)
$ 1,092 
Denominator:
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding/weighted-average units outstanding—basic (shares)
 
 
 
11,953 1
29,963 1
Effect of dilutive securities:
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding/weighted-average units outstanding—diluted (shares)
 
 
 
11,953 1
30,125 1
Earnings per share of Class A common stock/earnings per unit—basic (in USD per share)
 
 
 
$ (1.06)1
$ 0.04 1
Earnings per share of Class A common stock/earnings per unit—diluted (in USD per share)
 
 
 
$ (1.06)1
$ 0.04 1
Restricted Stock
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
Restricted Class B units (shares)
 
 
 
0 
162 
Earnings Per Share - Narrative (Details)
0 Months Ended 2 Months Ended 3 Months Ended
Feb. 4, 2015
Apr. 1, 2015
Apr. 1, 2015
Stock options
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares
 
 
2,618,281 
Class B common stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares
 
 
24,191,853 
Common stock |
Class A common stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Shares issued during the period
5,968,841 
5,750,000 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
339,306 
339,306 
339,306 
IPO |
Common stock |
Class A common stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Shares issued during the period
5,750,000 
 
5,750,000 
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 1, 2015
Mar. 26, 2014
Cash paid for:
 
 
Income taxes, net of refunds
$ 49 
$ 355 
Interest
149 
22 
Non-cash investing activities:
 
 
Accrued purchases of property and equipment
3,088 
909 
Class A common stock
 
 
Non-cash investing activities:
 
 
Class A common stock issued connection with the acquisition of the Former SSE Equity Owners
6 
0 
Class B common stock
 
 
Non-cash financing activities:
 
 
Cancellation of Class B common stock in connection with the Organizational Transactions
$ 6 
$ 0 
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 1, 2015
Retail site
Dec. 31, 2013
Office building
Apr. 1, 2015
Letter of credit
Loss Contingencies [Line Items]
 
 
 
Letters of credit outstanding
$ 160 
$ 80 
 
Renewal term
 
 
1 year 
Related Party Transactions (Details) (USD $)
12 Months Ended 3 Months Ended
Dec. 31, 2014
USHG
Apr. 1, 2015
USHG
Apr. 1, 2015
USHG
Management fee
Mar. 26, 2014
USHG
Management fee
Mar. 26, 2014
USHG
Rent expense
Apr. 1, 2015
USHG
Self insurance health care expense
Mar. 26, 2014
USHG
Self insurance health care expense
Apr. 1, 2015
Hudson Yards Sports and Entertainment
Apr. 1, 2015
Hudson Yards Sports and Entertainment
Concession income
Mar. 26, 2014
Hudson Yards Sports and Entertainment
Concession income
Apr. 1, 2015
Madison Square Park Conservancy
Rent expense
Mar. 26, 2014
Madison Square Park Conservancy
Rent expense
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Management fee
2.50% 
 
 
 
 
 
 
 
 
 
 
 
Expenses from transactions with related party
 
 
$ 0 
$ 592,000 
$ 42,000 
$ 151,000 
$ 313,000 
 
 
 
$ 0 
$ 97,000 
Amounts due to related parties
238,000 
39,000 
 
 
 
 
 
 
 
 
 
 
Number of renewal terms
 
 
 
 
 
 
 
5 
 
 
 
 
Renewal option period
 
 
 
 
 
 
 
5 years 
 
 
 
 
Revenue from related parties
 
 
 
 
 
 
 
 
$ 0 
$ 0