CHIPOTLE MEXICAN GRILL, INC. (NYSE:CMG) Files An 8-K Costs Associated with Exit or Disposal ActivitiesItem 2.05.
As announced on May23, 2018, Chipotle Mexican Grill, Inc. has made a determination to open a headquarters office in Newport Beach, California, consolidate certain corporate administrative functions in its existing office in Columbus, Ohio, and close its existing headquarters office in Denver, Colorado, as well as an additional corporate office in New York, New York. During the week of June18, 2018, substantially all affected employees were informed whether they will be extended an opportunity to continue with Chipotle in the new organization, and for those not continuing, of the transition assistance being provided by Chipotle. These communications were largely completed by June22, 2018.
In connection with the office moves and related organizational and personnel changes, Chipotle expects to incur certain one-time cash and non-cash expenses related to employee relocation and transition costs, lease exit costs in connection with office leases in Denver and New York, and other transition activities, of between an estimated $70 and $80million in the aggregate. Cash charges will consist of an estimated $40 to $45million of employee and other related costs and an estimated $20 to $25 million in office-related costs, and will primarily be paid during 2018 and the first half of 2019. Non-cash charges of an estimated $10million primarily consist of additional asset-related costs, as well as costs associated with the modification of equity awards for employees.
Chipotle also announced on June27, 2018 that it will close between 55 and 65 restaurants, including five Pizzeria Locale restaurants, beginning in the second quarter of 2018 and continuing over the next several quarters. The restaurant closures will result in cash charges of between approximately $15 and $25million in the aggregate, and non-cash charges of approximately $25million net of deferred rent credits, which are expected to be incurred beginning in the second quarter of 2018 and through the first half of 2019.
Certain of the statements made above in this Item 2.05, including statements regarding anticipated and estimated employee relocations and reductions, office transitions, related expenses, and the timing of those actions, are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We use words and phrases such as “expects,” “will,” “anticipated”, “estimated” and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements herein are based on information available to us as of the date any such statements are made and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the following: the potential for increased employee transition costs or difficulty retaining key employees, including as a result of market pressures or a reluctance to relocate to a new geographic area; difficulties in identifying or coming to terms with potential assignees or subtenants for leased office space; and other risk factors described from time to time in the reports, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, we file with the Securities and Exchange Commission.
| Item 2.05. | Financial Statements and Exhibits. |
Exhibit Index
| Exhibit99.1 | Press Release dated June27, 2018 |
CHIPOTLE MEXICAN GRILL INC ExhibitEX-99.1 2 d656360dex991.htm EX-99.1 EX-99.1 Exhibit 99.1 PR Contact: Laurie Schalow (303) 222-5912 Lschalow@chipotle.com IR Contact: Coralie Witter (303) 605-1087 cwitter@chipotle.com CHIPOTLE ANNOUNCES GROWTH STRATEGIES FOCUSED ON WINNING TODAY AND CULTIVATING A BETTER FUTURE Denver,…To view the full exhibit click here
About CHIPOTLE MEXICAN GRILL, INC. (NYSE:CMG)
Chipotle Mexican Grill, Inc., together with its subsidiaries operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. The Company operates approximately 1,970 Chipotle restaurants throughout the United States, over 10 in Canada, seven in England, four in France and one in Germany. The Company’s restaurants include over 10 ShopHouse Southeast Asian Kitchen restaurants, serving Asian-inspired cuisine. The Company owned and operated approximately three Pizzeria Locale restaurants, a fast casual pizza concept, resulting in a totaling of approximately 2,010 restaurants. The Company sells gift cards which do not have an expiration date.