SEC Comment Letter for CHEESECAKE FACTORY INC (CAKE) (CIK 0000887596) (CAKE) — Sep 15, 2009
CHEESECAKE FACTORY INC (CAKE) (CIK 0000887596)
Date: Sept. 15, 2009 · CIK: 0000887596 · Accession: 0000000000-09-051070
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-20574
Letter
Mail Stop 3561 September 15, 2009 Via Fax & U.S. Mail Mr. W. Douglas Benn Chief Financial Officer 26901 Malibu Hills Road Calabasas Hills, California 91301
Re: The Cheesecake Factory Incorporated Form 10-K for the year ended December 30, 2008 Filed February 27, 2009 File No. 000-20574
Dear Mr. Benn:
We have reviewed your filing and have the following comments. Unless otherwise indicated, we think you should revi se your document in future filings in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revisi on is unnecessary. Please be as detailed as necessary in your explanation. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Af ter reviewing this information, we may raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Please respond to confirm that such comments will be complied with, or, if certain of the comments are deemed inappropr iate, advise the staff of your reason. Your response should be submitted in electronic form, under the label “corresp” with a copy to the staff. Please respond w ithin ten (10) business days.
Form 10-K for the year ended December 30, 2008
Statements of Operations, page 55
1. We note from the statement of operati ons that you recorded a $2,952 impairment of assets during 2008. Please provide us with, and di sclose in future filings, a
Mr. W. Douglas Benn The Cheesecake Factory Incorporated September 15, 2009 Page 2
description of the impaired long-live d asset (asset group) and the facts and circumstances leading to the impairment , as required by paragraph 26 of SFAS No. 144.
Notes to the Financial Statements
Note 7. Long Term Debt, page 65
2. We note your disclosure that you modified the revolving credit facility on March 5, 2008 and January 5, 2009. Please tell us how you accounted for these modifications in accordance with EITF 98- 14. As part of your response, please tell us the amount of any fees or third pa rty costs that were pa id as part of the modification and explain to us how you accounted for these costs.
Note 10. Commitments and Contingencies, page 67
3. We note your disclosure that implementation of the terms of the settlement of the “Option Derivative Actions” is ongoing. Please tell us if the terms of the settlement include any payments to be made by the Company, and if that amount is material, please disclose the amount and a ny related accruals in future filings. Note 12. Stock-Based Compensation, page 70
4. We note your disclosure that capitali zed stock-based compensation for fiscal years 2008, 2007, and 2006 was $1.3 million, $1.7 million and $1.3 million, respectively and was included in property and equipment, net and other assets on the balance sheet. Please tell us, and disclose in future filings, the nature of these costs and your accounting polic y for capitalizing stock compensation costs.
Form 10-Q for the quarter ended June 30, 2009
Note 1. Basis of Presentation and Significant Accounting Policies – Impairment of Long-Lived Assets
5. We note your disclosure that you are curr ently monitoring three Grand Lux Café locations which have a combined carry ing value of $29.1 million and that until you know the full extent of the impact from the sales and cost initiatives recently implemented throughout the Grand Lux Café concept, as well as further actions taken at these specific locations, it is premature to determine that an impairment charge is warranted. Please tell us if th ere have been any changes in events or circumstances, such as those set forth in paragraph 8 of SFAS 144, that indicate the carrying amount of these lo cations may not be recoverabl e. If any such events or circumstances have occurred, please te ll us if you performed an impairment analysis on these three restaurants. If you have not performed an impairment
Mr. W. Douglas Benn The Cheesecake Factory Incorporated September 15, 2009 Page 3
analysis on these locations subsequent to December 30, 2008, please explain to us why you do not believe one is required. S ee paragraphs 7-9 of SFAS No. 144 for guidance.
Management’s Discussion and Analysis
– Results of Operations – Thirteen Weeks Ended June 30, 2009 Compared to Thirteen Weeks Ended July 1, 2008
6. We note your disclosure that the majo rity of the increase in general and administrative expenses is due to a $2.6 million expense resulting from a change in the amount and structure of the founde r’s retirement benefit contained in the employment agreement with your CEO. Pl ease explain to us the nature of the $2.6 million expense and explain to us how you determined or calculated the amount.
********
We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
Mr. W. Douglas Benn The Cheesecake Factory Incorporated September 15, 2009 Page 4
You may contact Claire Erlanger at (202) 551-3301 if you have questions regarding comments on the financia l statements and related matte rs. Please contact me at (202) 551-3813 with any other questions.
Sincerely,
Linda Cvrkel Branch Chief
Show Raw Text
Mail Stop 3561
September 15, 2009 Via Fax & U.S. Mail
Mr. W. Douglas Benn Chief Financial Officer 26901 Malibu Hills Road Calabasas Hills, California 91301
Re: The Cheesecake Factory Incorporated
Form 10-K for the year ended December 30, 2008
Filed February 27, 2009
File No. 000-20574
Dear Mr. Benn:
We have reviewed your filing and have the following comments. Unless
otherwise indicated, we think you should revi se your document in future filings in
response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revisi on is unnecessary. Please be as detailed as
necessary in your explanation. In some of our comments, we may ask you to provide us
with information so we may better understand your disclosure. Af ter reviewing this
information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We
welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Please respond to confirm that such comments will be complied with, or, if
certain of the comments are deemed inappropr iate, advise the staff of your reason. Your
response should be submitted in electronic form, under the label “corresp” with a copy to the staff. Please respond w ithin ten (10) business days.
Form 10-K for the year ended December 30, 2008
Statements of Operations, page 55
1. We note from the statement of operati ons that you recorded a $2,952 impairment
of assets during 2008. Please provide us with, and di sclose in future filings, a
Mr. W. Douglas Benn
The Cheesecake Factory Incorporated
September 15, 2009 Page 2
description of the impaired long-live d asset (asset group) and the facts and
circumstances leading to the impairment , as required by paragraph 26 of SFAS
No. 144.
Notes to the Financial Statements
Note 7. Long Term Debt, page 65
2. We note your disclosure that you modified the revolving credit facility on March
5, 2008 and January 5, 2009. Please tell us how you accounted for these
modifications in accordance with EITF 98- 14. As part of your response, please
tell us the amount of any fees or third pa rty costs that were pa id as part of the
modification and explain to us how you accounted for these costs.
Note 10. Commitments and Contingencies, page 67
3. We note your disclosure that implementation of the terms of the settlement of the
“Option Derivative Actions” is ongoing. Please tell us if the terms of the
settlement include any payments to be made by the Company, and if that amount is material, please disclose the amount and a ny related accruals in future filings.
Note 12. Stock-Based Compensation, page 70
4. We note your disclosure that capitali zed stock-based compensation for fiscal
years 2008, 2007, and 2006 was $1.3 million, $1.7 million and $1.3 million, respectively and was included in property and equipment, net and other assets on
the balance sheet. Please tell us, and disclose in future filings, the nature of these costs and your accounting polic y for capitalizing stock compensation costs.
Form 10-Q for the quarter ended June 30, 2009
Note 1. Basis of Presentation and Significant Accounting Policies
– Impairment of Long-Lived Assets
5. We note your disclosure that you are curr ently monitoring three Grand Lux Café
locations which have a combined carry ing value of $29.1 million and that until
you know the full extent of the impact from the sales and cost initiatives recently
implemented throughout the Grand Lux Café concept, as well as further actions taken at these specific locations, it is premature to determine that an impairment charge is warranted. Please tell us if th ere have been any changes in events or
circumstances, such as those set forth in paragraph 8 of SFAS 144, that indicate
the carrying amount of these lo cations may not be recoverabl e. If any such events
or circumstances have occurred, please te ll us if you performed an impairment
analysis on these three restaurants. If you have not performed an impairment
Mr. W. Douglas Benn
The Cheesecake Factory Incorporated
September 15, 2009 Page 3
analysis on these locations subsequent to December 30, 2008, please explain to us
why you do not believe one is required. S ee paragraphs 7-9 of SFAS No. 144 for
guidance.
Management’s Discussion and Analysis
– Results of Operations
– Thirteen Weeks Ended June 30, 2009 Compared to Thirteen Weeks Ended July 1, 2008
6. We note your disclosure that the majo rity of the increase in general and
administrative expenses is due to a $2.6 million expense resulting from a change
in the amount and structure of the founde r’s retirement benefit contained in the
employment agreement with your CEO. Pl ease explain to us the nature of the
$2.6 million expense and explain to us how you determined or calculated the amount.
********
We urge all persons who are responsi ble for the accuracy an d adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision. Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the
filing;
staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
Mr. W. Douglas Benn
The Cheesecake Factory Incorporated September 15, 2009 Page 4
You may contact Claire Erlanger at (202) 551-3301 if you have questions
regarding comments on the financia l statements and related matte rs. Please contact me at
(202) 551-3813 with any other questions.
Sincerely,
Linda Cvrkel Branch Chief
VIA FACSIMILE
(866) 743-1789