Raises Adjusted EBITDA Guidance for Fiscal
2023
Repaid $15.5 Million of Debt and Repurchased
$5 Million of Stock
Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) ("Red Robin" or
the "Company"), a full-service restaurant chain serving an
innovative selection of high-quality gourmet burgers in a
family-friendly atmosphere, today reported financial results for
the fiscal second quarter ended July 9, 2023.
Highlights for the Second Quarter of Fiscal 2023, Compared to
the Second Quarter of Fiscal 2022:
- Total revenues are $298.6 million, an increase of $4.6 million
compared to 2022.
- Comparable restaurant revenue(1) increased 1.5%.
- Tenth consecutive quarter of comparable restaurant revenue(1)
growth.
- Comparable restaurant dine-in sales(2) increased 5.9%.
- Net income is $3.9 million, an increase of $21.9 million
compared to 2022.
- Adjusted EBITDA(3) (a non-GAAP metric) is $15.5 million, a $3.7
million increase compared to 2022.
- Completed Sale-Leaseback transaction for nine restaurants,
generating net proceeds of approximately $28.5 million and a gain,
net of expenses of $14.6 million.
- Repaid $15.5 million of debt and repurchased $5.0 million of
stock.
Highlights for the Year to Date Period of Fiscal 2023,
Compared to the Year to Date Period of Fiscal 2022:
- Total revenues are $716.5 million, an increase of $27.3 million
compared to 2022.
- Comparable restaurant revenue(1) increased 5.5%.
- Comparable restaurant dine-in sales(2) increased 11.8%.
- Net income is $0.7 million, an increase of $22.2 million
compared to 2022.
- Adjusted EBITDA(3) (a non-GAAP metric) is $51.5 million, an
$11.6 million increase compared to 2022.
(1)
Comparable restaurant revenue represents
revenue from Company-owned restaurants that have operated five full
quarters as of the end of the period presented.
(2)
Comparable restaurant dine-in sales are
calculated based on the Company’s point-of-sale sales data, which
does not include adjustments for loyalty breakage.
(3)
See Schedule III for a reconciliation of
Adjusted EBITDA, a non-GAAP measure, to Net income (loss).
G.J. Hart, Red Robin’s President and Chief Executive Officer
said, "In the first half of 2023, we began executing the North Star
plan by investing in our people, food, and hospitality. We are
pleased with our traction so far, the clear improvement in guest
satisfaction, and reinvigorated financial performance. Adjusted
EBITDA is $51.5 million in just the first half of 2023, compared to
$52.1 million in the entire year of 2022. The meaningful changes we
have implemented are delivering on our promises to team members,
guests, and investors. While we are in the early stages of the
comeback of this iconic brand, we are confident in our strategic
direction and see tremendous runway ahead."
Second Quarter 2023 Financial Summary
The following table presents financial results for the second
fiscal quarter of 2023, compared to results from the same period in
2022:
Twelve Weeks Ended
July 9, 2023
July 10, 2022
Total revenues (millions)
$
298.6
$
294.1
Restaurant revenues (millions)
293.3
288.6
Net income (loss) (millions)
3.9
(18.0
)
Income (loss) from operations
(millions)
10.3
(13.4
)
Income (loss) from operations as a percent
of total revenues
3.4
%
(4.6
)%
Restaurant Level Operating Profit
(millions)(1)
$
36.9
$
39.3
Restaurant Level Operating Profit
Margin(1)
12.6
%
13.6
%
Adjusted EBITDA (millions)(2)
$
15.5
$
11.9
Net income (loss) per diluted share ($ per
share)
$
0.24
$
(1.13
)
Adjusted income (loss) per diluted share
($ per share)(3)
$
(0.24
)
$
(0.75
)
(1)
See Schedule II for a reconciliation of
Restaurant Level Operating Profit and Restaurant Level Operating
Profit Margin, non-GAAP measures, to Income (loss) from operations
and Income (loss) from operations as a percentage of total
revenues, respectively.
(2)
See Schedule III for a reconciliation of
Adjusted EBITDA, a non-GAAP measure, to Net income (loss).
(3)
See Schedule I for a reconciliation of
Adjusted income (loss) per diluted share, a non-GAAP measure, to
Net income (loss) per diluted share.
Balance Sheet and Liquidity
As of July 9, 2023, Red Robin had outstanding borrowings under
its credit facility of $197.5 million, in addition to amounts
issued under letters of credit of $11.7 million, and liquidity of
approximately $69.0 million, including cash and cash equivalents
and available borrowing capacity under its credit facility.
Share Repurchase Activity
During the second quarter of fiscal 2023, the Company
repurchased 382,017 shares of stock under its existing $75 million
share repurchase program at an average price of $13.19 for a total
of approximately $5.0 million. The Company’s Credit Agreement
allows for an additional $5 million of share repurchases, for a
total of $10 million. Pursuant to the repurchase program, purchases
may be made from time to time at the Company's discretion and the
Company is not obligated to acquire any particular amount of common
stock.
Sale-Leaseback Activity
During the second quarter of fiscal 2023, the Company completed
a $28.9 million Sale-Leaseback transaction with Essential
Properties Realty Trust, Inc. (NYSE: EPRT) to sell and
simultaneously lease-back nine owned properties.
The Company is currently marketing approximately 20 additional
owned properties for potential Sale-Leaseback transactions and
anticipates closing one or more transactions in 2023. The Company
continues to expect to use net proceeds to repay debt, fund capital
investments, and support share repurchase activity pursuant to the
Company's Credit Agreement.
Acquisition of Five Red Robin Franchised Restaurants
During the second quarter of fiscal 2023, the Company acquired
five Red Robin restaurants in the northeastern United States from a
long-term franchisee who retired for $3.5 million. The acquisition
is anticipated to add approximately $1 million of net, annual
EBITDA contribution and is included in the Company's Initial,
Prior, and Current Guidance.
Outlook for Fiscal 2023 and Guidance Policy
The Company provides guidance of select information related to
the Company’s financial and operating performance, and such
measures may differ from year to year. The projections are as of
this date and Red Robin assumes no obligation to update or
supplement this information.
The Company's Initial, Prior, and Current guidance metrics are
as follows:
Initial Guidance February 28,
2023
Prior Guidance May 28,
2023
Current Guidance August 15,
2023
Total Revenue
Approximately $1.3 billion
At least $1.3 billion
At least $1.3 billion
Comparable Restaurant Revenue
N/A
Increase 2.0% to 4.0%
Increase 1.0% to 3.0%
Restaurant Level Operating Profit(1),
inclusive of investments in the Guest experience
At least 13.0%
At least 13.5%
At least 13.5%
Selling, general and administrative costs,
inclusive of incentive compensation costs
$120 to $125 million
$127 to $132 million
$127 to $132 million
Capital expenditures
$35 to $40 million
$45 to $50 million
$45 to $50 million
Adjusted EBITDA(1)
$62.5 to $72.5 million
$70 to $80 million
$72.5 to $82.5 million
Fiscal 2023 includes 53 weeks versus 52 weeks in fiscal
2022.
(1)
The Company has not provided a
reconciliation of its Restaurant Level Operating Profit or Adjusted
EBITDA outlook to the most comparable GAAP measure of Income from
operations and Net income, respectively. Providing Income (loss)
from operations and Net Income (loss) guidance is potentially
misleading and not practical given the difficulty of projecting
event-driven transactional and other non-core operating items that
are included in Income from operations and Net income (loss),
including asset impairments and income tax valuation adjustments.
The reconciliations of Restaurant Level Operating Profit and
Adjusted EBITDA to Income from operations and Net income (loss),
respectively, for the historical periods presented herein is
indicative of the reconciliations that will be prepared upon
completion of the periods covered by the non-GAAP guidance. Please
refer to the historical period Reconciliation of Income from
operations to Restaurant Level Operating Profit and Net income
(loss) to EBITDA and Adjusted EBITDA included on Schedule II and
Schedule III of this release.
Investor Conference Participation
Red Robin will host an investor conference call to discuss
financial results for its second quarter of fiscal 2023 and outlook
for fiscal 2023 today at 5:00 p.m. ET. The conference call can be
accessed live over the phone by dialing 201-689-8560 which will be
answered by an operator or by clicking Call Me™.
The conference call should be accessed at least 10 minutes prior
to its scheduled start.
A replay will be available from approximately two hours after
the end of the conference call and can be accessed by dialing
412-317-6671; the conference ID is 13740695. The replay will be
available through Thursday, August 24, 2023.
The call will be webcast live and later archived from the
Company’s Investor Relations website.
Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB)
Red Robin Gourmet Burgers, Inc. (www.redrobin.com), is a casual
dining restaurant chain founded in 1969 that operates through its
wholly-owned subsidiary, Red Robin International, Inc., and under
the trade name, Red Robin Gourmet Burgers and Brews. We believe
nothing brings people together like burgers and fun around our
table, and no one makes moments of connection over craveable food
more memorable than Red Robin. We serve a variety of burgers and
mainstream favorites to Guests of all ages in a casual, playful
atmosphere. In addition to our many burger offerings, Red Robin
serves a wide array of salads, appetizers, entrees, desserts,
signature beverages and Donatos® pizza at select locations. It's
now easy to enjoy Red Robin anywhere with online ordering available
for to-go, delivery and catering, or you can download our new app
for easy customization, access to the Red Robin Royalty® dashboard
and more. There are more than 500 Red Robin restaurants across the
United States and Canada, including those operating under franchise
agreements. Red Robin… YUMMM®!
Forward-Looking Statements
Forward-looking statements in this press release regarding the
Company's future performance; the implementation of the Company’s
“North Star” plan and the anticipated impacts thereof; expense
management; product quality; our anticipated investments including
in labor, kitchen equipment, product enhancement, and the
renovation program, and the anticipated impacts of such investments
on Guest satisfaction; our Sale-Leaseback transactions and
anticipated uses of the proceeds of such transaction; potential
future transactions such as potential additional Sale-Leaseback
transactions; potential repurchases by the Company of shares of its
common stock; executive changes and the anticipated impacts thereof
on the Company’s operations, Guest experience and shareholder
value; the anticipated impacts of recently acquired restaurants;
anticipated uses of capital and planned investments in technology
platforms; continued Guest demand for dine-in and off-premise
offerings; the impact of industry labor and supply chain challenges
and inflationary pressures; statements under the heading "Outlook
for Fiscal 2023 and Guidance Policy," including with respect to
total revenue, comparable restaurant revenue, restaurant level
operating profit, selling, general and administrative costs,
capital expenditures and Adjusted EBITDA; our ability to mitigate
cost inflation; and all other statements that are not historical
facts are made under the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
based on assumptions believed by the Company to be reasonable and
speak only as of the date on which such statements are made.
Without limiting the generality of the foregoing, words such as
"expect," "believe," "anticipate," "intend," "plan," "project,"
"could," "should," "will," "outlook" or "estimate," or the negative
or other variations thereof or comparable terminology are intended
to identify forward-looking statements. Except as required by law,
the Company undertakes no obligation to update such statements to
reflect events or circumstances arising after such date and
cautions investors not to place undue reliance on any such
forward-looking statements. Forward-looking statements involve
risks and uncertainties that could cause actual results to differ
materially from those described in the statements based on a number
of factors, including but not limited to the following: the
effectiveness of the Company's strategic initiatives, including our
“North Star” plan, labor and service models, and operational
improvement initiatives and our ability to execute on such
strategic initiatives; our ability to recruit, staff, train, and
retain our workforce; the effectiveness and timing of the Company's
marketing strategies and promotions; menu changes and pricing
strategy; the anticipated sales growth, costs, and timing of the
Donatos® expansion; the implementation, rollout, and timing of new
technology solutions; risks associated with the transition and
retention of our key personnel; risks associated with our completed
and potential future Sale-Leaseback transactions; risks associated
with our share repurchase program, including that we are not
obligated to acquire any particular amount of our common stock
thereunder; risks associated with the acquisition of additional
restaurants; our ability to achieve revenue and cost savings from
off-premises sales and other initiatives; competition in the casual
dining market and discounting by competitors; changes in consumer
spending trends and habits; changes in the availability and cost of
food products, labor, and energy; general economic and operating
conditions, including changes in consumer disposable income,
weather conditions, and other events affecting the regions where
our restaurants are operated; the adequacy of cash flows and the
cost and availability of capital or credit facility borrowings;
changes in federal, state, or local laws and regulations affecting
the operation of our restaurants, including minimum wage and tip
credit regulations, consumer and occupational health and safety
regulations, health insurance coverage and other benefits,
nutritional disclosures, and employment eligibility-related
documentation requirements; costs and other effects of legal claims
by Team Members, franchisees, customers, vendors, stockholders, and
others, including negative publicity regarding food safety or cyber
security; the impact of COVID-19 or future public health
emergencies; and other risk factors described from time to time in
the Company's Form 10-K, Form 10-Q, and Form 8-K reports (including
all amendments to those reports) filed with the U.S. Securities and
Exchange Commission.
Comparable Restaurant Revenue
The following table presents the percentage change in comparable
restaurant revenue in the first and second quarter, and year to
date period of fiscal 2023:
Comparable Restaurant Increase
(Decrease) Versus Prior Year
Q1 2023
Q2 2023
Year to Date, July 9
2023
Guest Traffic
0.6
%
(6.0
)%
(2.2
)%
Average Guest Check
Menu Price Increase
7.2
%
8.8
%
8.0
%
Menu Mix
0.8
%
(2.1
)%
(0.7
)%
Discounts
—
%
0.8
%
0.4
%
Total Guest Check
8.0
%
7.5
%
7.7
%
Total Change in Comparable Restaurant
Revenue
8.6
%
1.5
%
5.5
%
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In
thousands, except per share data) (Unaudited)
Twelve Weeks Ended
Twenty-Eight Weeks
Ended
July 9, 2023
July 10, 2022
July 9, 2023
July 10, 2022
Revenues:
Restaurant revenue
$
293,281
$
288,621
$
700,174
$
669,218
Franchise and other revenues
5,367
5,435
16,286
19,912
Total revenues
298,648
294,056
716,460
689,130
Costs and expenses:
Restaurant operating costs (excluding
depreciation and amortization shown separately below):
Cost of sales
71,372
72,702
171,042
163,643
Labor
109,678
101,643
255,100
239,751
Other operating
51,842
52,003
123,892
119,867
Occupancy
23,482
22,980
53,283
53,579
Depreciation and amortization
15,756
17,637
37,581
41,556
General and administrative
20,667
18,730
47,466
43,167
Selling
6,196
13,365
13,921
23,308
Pre-opening and acquisition costs
4
235
586
297
Other charges (gains), net
(10,607
)
8,146
(848
)
13,453
Total costs and expenses
288,391
307,441
702,023
698,621
Income (loss) from operations
10,257
(13,385
)
14,437
(9,491
)
Other expense:
Interest expense, net and other
6,179
4,147
13,597
11,560
Income (loss) before income taxes
4,078
(17,532
)
840
(21,051
)
Income tax provision (benefit)
156
434
176
496
Net income (loss)
$
3,922
$
(17,966
)
$
664
$
(21,547
)
Earnings (loss) per share:
Basic
$
0.24
$
(1.13
)
$
0.04
$
(1.37
)
Diluted
$
0.24
$
(1.13
)
$
0.04
$
(1.37
)
Weighted average shares outstanding:
Basic
16,037
15,830
16,014
15,783
Diluted
16,291
15,830
16,367
15,783
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands,
except per share amounts)
(Unaudited)
July 9, 2023
December 25, 2022
Assets:
Current assets:
Cash and cash equivalents
$
44,034
$
48,826
Accounts receivable, net
12,723
21,427
Inventories
26,899
26,447
Income tax receivable
461
562
Prepaid expenses and other current
assets
13,368
12,938
Restricted cash
12,213
9,380
Total current assets
109,698
119,580
Property and equipment, net
289,694
318,517
Operating lease assets, net
369,048
361,432
Intangible assets, net
17,944
17,727
Other assets, net
12,014
14,889
Total assets
$
798,398
$
832,145
Liabilities and stockholders'
equity:
Current liabilities:
Accounts payable
$
25,890
$
39,336
Accrued payroll and payroll-related
liabilities
39,350
33,666
Unearned revenue
33,808
46,944
Current portion of operating lease
obligations
49,213
47,394
Current portion of long-term debt
2,875
3,375
Accrued liabilities and other
53,208
49,498
Total current liabilities
204,344
220,213
Long-term debt
188,090
203,155
Long-term portion of operating lease
obligations
391,370
393,157
Other non-current liabilities
11,568
13,831
Total liabilities
795,372
830,356
Stockholders' equity:
Common stock; $0.001 par value: 45,000
shares authorized; 20,449 shares issued; 15,931 and 15,934 shares
outstanding as of July 9, 2023 and December 25, 2022
20
20
Preferred stock, $0.001 par value: 3,000
shares authorized; no shares issued and outstanding as of July 9,
2023 and December 25, 2022
—
—
Treasury stock 4,518 and 4,515 shares, at
cost, as of July 9, 2023 and December 25, 2022
(172,546
)
(182,810
)
Paid-in capital
229,098
238,803
Accumulated other comprehensive loss, net
of tax
(22
)
(34
)
Accumulated deficit
(53,524
)
(54,190
)
Total stockholders' equity
3,026
1,789
Total liabilities and stockholders'
equity
$
798,398
$
832,145
Schedule I
Reconciliation of Non-GAAP Results to GAAP
Results
Reconciliation of Net income (loss)
to Non-GAAP Adjusted Net income (loss) and Adjusted income (loss)
per share - diluted
(In thousands, except per share data,
unaudited)
In addition to the results provided in accordance with Generally
Accepted Accounting Principles ("GAAP") throughout this press
release, the Company has provided Adjusted net income (loss) and
Adjusted loss per share - diluted, which are non-GAAP measurements
which present the twelve and twenty-eight weeks ended July 9, 2023
and July 10, 2022. Net income (loss) and diluted loss per share,
excluding the effects of change in estimate - gift card breakage,
asset impairment, litigation contingencies, the write-off of
unamortized debt issuance costs, restaurant closure costs, other
financing costs, gain on sale leaseback, net of expenses, closed
corporate office costs, net of sublease income, COVID-19 related
charges, severance and executive transition costs, related income
tax effects, and other. We have revised our definition of adjusted
loss per diluted share to exclude gain on sale leaseback, net of
expenses and other. We did not revise the prior year’s adjusted
loss per diluted share because there were no other charges similar
in nature to these costs. The Company believes the presentation of
net income (loss) and loss per share exclusive of the identified
items gives the reader additional insight into the ongoing
operational results of the Company. Management believes this
supplemental information will assist with comparisons of past and
future financial results against the present financial results
presented herein. Income tax effect of reconciling items was
calculated based on the change in the total tax provision
calculation after adjusting for the identified item. The non-GAAP
measurements are intended to supplement the presentation of the
Company’s financial results in accordance with GAAP.
Twelve Weeks Ended
Twenty-Eight Weeks
Ended
July 9, 2023
July 10, 2022
July 9, 2023
July 10, 2022
Net income (loss) as reported
$
3,922
$
(17,966
)
$
664
$
(21,547
)
Gain on sale leaseback, net of
expenses
(14,586
)
—
(14,586
)
—
Litigation contingencies
1,240
(1,806
)
5,540
(86
)
Restaurant closure costs, net
(112
)
930
1,638
1,879
Severance and executive transition
962
129
2,854
129
Asset impairment
1,693
8,739
2,387
10,861
Other (1)
83
—
1,144
—
Closed corporate office costs, net of
sublease income
113
—
175
—
Other financing costs(2)
—
61
—
370
COVID-19 related charges
—
93
—
300
Change in estimate, gift card
breakage(3)
—
—
—
(4,842
)
Write-off of unamortized debt issuance
costs(4)
—
—
—
1,727
Income tax expense
2,758
(2,118
)
220
(2,688
)
Adjusted net income (loss)
$
(3,927
)
$
(11,938
)
$
36
$
(13,897
)
Basic loss per share:
Net income (loss) as reported
$
0.24
$
(1.13
)
$
0.04
$
(1.37
)
Gain on sale leaseback, net of
expenses
(0.91
)
—
(0.91
)
—
Litigation contingencies
0.08
(0.11
)
0.35
(0.01
)
Change in estimate, gift card breakage
(0.01
)
0.06
0.10
0.12
Restaurant closure costs, net
0.06
0.01
0.18
0.01
Write-off of unamortized debt issuance
cost
0.11
0.55
0.15
0.69
Severance and executive transition
0.01
—
0.07
—
Income tax expense
0.01
—
0.01
—
Asset impairment
—
—
—
0.02
Other
—
0.01
—
0.02
Other financing costs
—
—
—
(0.31
)
COVID-19 related charges
—
—
—
0.11
Closed corporate office costs, net of
sublease income
0.17
(0.14
)
0.01
(0.17
)
Adjusted loss per share - basic
$
(0.24
)
$
(0.75
)
$
—
$
(0.85
)
Diluted loss per share:
Net income (loss) as reported
$
0.24
$
(1.13
)
$
0.04
$
(1.37
)
Gain on sale leaseback, net of
expenses
(0.91
)
—
(0.89
)
—
Litigation contingencies
0.08
(0.11
)
0.34
(0.01
)
Restaurant closure costs, net
(0.01
)
0.06
0.10
0.12
Severance and executive transition
0.06
0.01
0.17
0.01
Asset impairment
0.11
0.55
0.15
0.69
Other
0.01
—
0.07
—
Closed corporate office costs, net of
sublease income
0.01
—
0.01
—
Other financing costs
—
—
—
0.02
COVID-19 related charges
—
0.01
—
0.02
Change in estimate, gift card breakage
—
—
—
(0.31
)
Write-off of unamortized debt issuance
costs
—
—
—
0.11
Income tax expense
0.17
(0.14
)
0.01
(0.17
)
Adjusted income (loss) per share -
diluted
$
(0.24
)
$
(0.75
)
$
—
$
(0.85
)
Weighted average shares outstanding:
Basic
16,037
15,830
16,014
15,783
Diluted(5)
16,037
15,830
16,367
15,783
(1)
Other primarily includes non-cash charges
related to terminated capital projects and disposals, and certain
insurance claim proceeds.
(2)
Other financing costs includes legal and
other charges related to the refinancing of our prior credit
agreement in the first quarter of fiscal year 2022.
(3)
During the twenty-eight weeks ended July
10, 2022, the Company re-evaluated the estimated redemption pattern
related to gift cards. The impact comprises $5.4 million included
in Franchise royalties, fees, and other revenue partially offset by
$0.6 million in gift card commission costs included in Selling on
the Condensed Consolidated Statements of Operations.
(4)
Write-off of unamortized debt issuance
costs related to the remaining unamortized debt issuance costs
related to our legacy credit agreement with the completion of the
refinancing of our Credit Agreement in the first quarter of fiscal
year 2022.
(5)
For the 12 weeks ending July 9, 2023 and
28 weeks ending July 9, 2023, the impact of dilutive shares is
excluded from the calculations as the adjustments for the quarter
resulted in adjusted net income (loss). For diluted shares reported
on the Condensed Consolidated Statement of Operations, the impact
of dilutive shares is included due to the reported net income for
the quarter.
Schedule II
Reconciliation of Income (Loss) from
Operations to Non-GAAP Restaurant-Level Operating Profit
(In thousands, unaudited)
The Company believes restaurant-level operating profit is an
important measure for management and investors because it is widely
regarded in the restaurant industry as a useful metric by which to
evaluate restaurant-level operating efficiency and performance. The
Company defines restaurant-level operating profit to be income from
operations less franchise royalties, fees and other revenue, plus
other charges (gains), net, pre-opening costs, selling costs,
general and administrative expenses, and depreciation and
amortization. The measure includes restaurant-level occupancy costs
that include fixed rents, percentage rents, common area maintenance
charges, real estate and personal property taxes, general liability
insurance, and other property costs, but excludes depreciation and
amortization expense, substantially all of which is related to
restaurant-level assets, because such expenses represent historical
sunk costs which do not reflect current cash outlay for the
restaurants. The measure also excludes selling costs and general
and administrative expenses, and therefore excludes costs
associated with selling, general, and administrative functions, and
pre-opening costs. The Company excludes Other charges (gains), net
because these costs are not related to the ongoing operations of
its restaurants. Restaurant-level operating profit is not a
measurement determined in accordance with GAAP and should not be
considered in isolation, or as an alternative, to income from
operations or net income (loss) as indicators of financial
performance. Restaurant-level operating profit as presented may not
be comparable to other similarly titled measures of other companies
in the Company's industry.
Twelve Weeks Ended
Twenty-Eight Weeks
Ended
July 9, 2023
July 10, 2022
July 9, 2023
July 10, 2022
Income from operations
$
10,257
(13.6
)%
$
(13,385
)
(6.2
)%
$
14,437
(4.5
)%
$
(9,491
)
(3.2
)%
Less:
Franchise royalties, fees and other
revenue
5,367
4.0
%
5,435
2.4
%
16,286
2.8
%
19,912
2.1
%
Add:
Other charges, net
(10,607
)
10.6
8,146
2.4
(848
)
3.1
13,453
1.4
Pre-opening costs
4
—
235
0.2
586
—
297
0.1
Selling
6,196
4.9
13,365
5.5
13,921
4.1
23,308
4.1
General and administrative expenses
20,667
7.0
18,730
6.3
47,466
6.7
43,167
6.5
Depreciation and amortization
15,756
6.0
17,637
6.9
37,581
6.0
41,556
7.2
Restaurant-level operating profit
$
36,907
$
39,293
$
96,857
$
92,378
Income (loss) from operations as a
percentage of total revenues
3.4
%
(4.6
)%
(4.5
)%
(3.2
)%
Restaurant-level operating profit margin
(as a percentage of restaurant revenue)
12.6
%
13.6
%
13.8
%
13.8
%
Schedule III
Reconciliation of Net Income (Loss) to
EBITDA and Adjusted EBITDA
(In thousands, unaudited)
The Company believes the non-GAAP measures of EBITDA and
adjusted EBITDA give the reader additional insight into the ongoing
operational results of the Company, and it is intended to
supplement the presentation of the Company's financial results in
accordance with GAAP. We define EBITDA as net income (loss) before
interest expense, income taxes, and depreciation and amortization.
Adjusted EBITDA further excludes the effects of change in
accounting estimate - gift card breakage, asset impairment,
litigation contingencies, restaurant closure costs, net, other
financing costs, COVID-19 related charges, severance and executive
transition costs, closed corporate office, net of sublease income,
and gain of sale leaseback, net of expenses, and other. We have
revised our definition of adjusted EBITDA to exclude gain of sale
leaseback, net of expenses and other. We did not revise prior
years’ adjusted EBITDA because there were no other charges similar
in nature to these costs. Other companies may define EBITDA and
adjusted EBITDA differently, and as a result our measure of EBITDA
and adjusted EBITDA may not be directly comparable to those of
other companies. EBITDA and adjusted EBITDA should be considered in
addition to, and not as a substitute for, net income (loss) as
reported in accordance with U.S. GAAP as a measure of
performance.
Twelve Weeks Ended
Twenty-Eight Weeks
Ended
July 9, 2023
July 10, 2022
July 9, 2023
July 10, 2022
Net income (loss) as reported
$
3,922
$
(17,966
)
$
664
$
(21,547
)
Interest expense, net
6,305
3,630
13,881
10,718
Income tax provision (benefit)
156
434
176
496
Depreciation and amortization
15,756
17,637
37,581
41,556
EBITDA
26,139
3,735
52,302
31,223
Change in accounting estimate, gift card
breakage
—
—
—
(4,842
)
Other charges, net:
Gain on sale leaseback, net of
expenses
(14,586
)
—
(14,586
)
—
Litigation contingencies
1,240
(1,806
)
5,540
(86
)
Restaurant closure costs, net
(112
)
930
1,638
1,879
Severance and executive transition
962
129
2,854
129
Asset impairment
1,693
8,739
2,387
10,861
Other
83
—
1,144
—
Closed corporate office costs, net of
sublease income
113
—
175
—
Other financing costs
—
61
—
370
COVID-19 related charges
—
93
—
300
Adjusted EBITDA
$
15,532
$
11,881
$
51,454
$
39,834
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230817844936/en/
For media relations questions: Kathleen Bush, Red Robin
Gourmet Burgers, Inc. kbush@redrobin.com (303) 846-5114
For investor relations questions: Raphael Gross, ICR
(203) 682-8253
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