Red Robin Gourmet Burgers, Inc., (NASDAQ:RRGB), 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 quarter ended July 9, 2017.
Second Quarter 2017 Financial Highlights Compared to Second
Quarter 2016
- Total revenues were $315.8 million, an
increase of 3.3%;
- Net income was $6.9 million compared to
$7.6 million;
- Comparable restaurant revenue increased
0.5% (using constant currency rates);
- Comparable restaurant guest counts
increased 1.0%;
- Adjusted EBITDA was $32.3 million
compared to $33.5 million (see Schedule III);
- GAAP earnings per diluted share were
$0.53 compared to $0.55; and
- Adjusted earnings per diluted share
were $0.61 compared to $0.75 (see Schedule I).
“We were pleased with our positive traffic trend driven by guest
response to our Tavern Double burger menu with Bottomless Steak
Fries, priced at $6.99 every day,” said Denny Marie Post, Red Robin
Gourmet Burgers, Inc. chief executive officer. “The expected
completion of the rollout of our off-premise revenue streams in the
back half of 2017 will allow us to continue our top-line sales
momentum. At the same time we're beginning to make progress on our
labor model improvements. We'll build on these and other priorities
through the balance of the year and into 2018.”
Operating Results
Total revenues, which primarily include Company-owned restaurant
revenue and franchise royalties, increased 3.3% to $315.8 million
in the second quarter of 2017 from $305.5 million in the second
quarter of 2016. Restaurant revenue increased $10.2 million,
primarily due to a $12.0 million increase in revenue from new
restaurant openings and a $1.3 million, or 0.5%, increase in
comparable restaurant revenue, partially offset by $3.1 million
from closed restaurants.
System-wide restaurant revenue (which includes franchised units)
for the second quarter of 2017 totaled $375.9 million, compared to
$366.0 million for the second quarter of 2016.
Comparable restaurant revenue(1) increased 0.5% in the second
quarter of 2017 compared to the same period a year ago, driven by a
1.0% increase in guest counts, partially offset by a 0.5% decrease
in average guest check. The decrease in average guest check
comprised a 2.2% decrease in menu mix, partially offset by a 1.7%
increase in pricing.
Restaurant-level operating profit margin (a non-GAAP financial
measure) was 19.9% in the second quarter of 2017 compared to 20.9%
in the same period a year ago. The 100 basis point margin decrease
in the second quarter of 2017 resulted from a 70 basis point
increase in labor costs, a 30 basis point increase in cost of
sales, and a 30 basis point increase in other restaurant operating
expenses, partially offset by a 30 basis point decrease in
occupancy costs. Schedule II of this earnings release defines
restaurant-level operating profit, discusses why it is a useful
metric for investors, and reconciles this metric to income from
operations and net income.
________________________________________ (1) Comparable
restaurants are those Company-owned restaurants that have operated
five full quarters during the period presented, and such
restaurants are only included in the comparable metrics if they are
comparable for the entirety of both periods presented.
Restaurant Revenue Performance
Q2 2017 Q2 2016 Average weekly
sales per unit(1): Company-owned – Total $ 55,234 $
54,877
Company-owned – Comparable $ 56,018 $ 55,760 Franchised units –
Comparable $ 60,685 $ 61,870 Total operating weeks: Company-owned
units 5,655 5,504 Franchised units 1,043 1,032
________________________________________ (1) Calculated
using constant currency rates. Using historical currency rates, the
average weekly sales per unit in the second quarter of 2016 for
Company-owned – Total and Company-owned – Comparable was $54,891
and $55,774. The Company calculates non-GAAP constant currency
average weekly sales per unit by translating prior year local
currency average weekly sales per unit to U.S. dollars based on
current quarter average exchange rates. The Company considers
non-GAAP constant currency average weekly sales per unit to be a
useful metric to investors and management as they facilitate a more
useful comparison of current performance to historical performance.
Other Results
Depreciation and amortization costs increased to $21.2 million
in the second quarter of 2017 from $19.2 million in the second
quarter of 2016. The increased depreciation was primarily related
to new restaurants opened since the second quarter of 2016 and
restaurants remodeled under the Brand Transformation
Initiative.
General and administrative costs were $21.9 million, or 6.9% of
total revenues, in the second quarter of 2017, compared to $20.0
million, or 6.5% of total revenues in the same period a year
ago.
Selling expenses were $10.2 million, or 3.2% of total revenues,
in the second quarter of 2017, compared to $11.0 million, or 3.6%,
of total revenues during the same period in the prior year.
Pre-opening and acquisition costs were $1.4 million in the
second quarter of 2017, compared to $2.2 million in the same period
a year ago. The decrease was primarily due to the number of
restaurant openings.
The Company realized a tax benefit of 0.3% in the second quarter
of 2017, compared to an effective tax rate of 15.4% expense for the
second quarter of 2016. The change in the second quarter effective
tax rate was primarily due to the decrease in income resulting in
the recognition of a quarterly tax benefit.
Net income for the second quarter ended July 9, 2017 was
$6.9 million compared to $7.6 million for the same period a year
ago. Earnings per diluted share for the second quarter 2017 were
$0.53 compared to $0.55 in second quarter 2016.
Excluding charges of $0.08 per diluted share for asset
impairment, adjusted earnings per diluted share for the second
quarter ended July 9, 2017 were $0.61. Excluding charges
of $0.20 per diluted share for asset impairment, adjusted earnings
per diluted share for the second quarter ended July 10, 2016 were
$0.75. See Schedule I for a reconciliation of adjusted net income
and adjusted earnings per share (each, a non-GAAP financial
measure) to net income and earnings per share.
Restaurant Development
During the second quarter of 2017, the Company opened three Red
Robin restaurants. The Company plans to open nine Red Robin
restaurants during the remainder of 2017.
The following table details restaurant unit data for our
Company-owned and franchised locations for the periods
indicated:
Twelve Weeks Ended Twenty-eight Weeks
Ended July 9, 2017 July 10, 2016 July
9, 2017 July 10, 2016 Company-owned: Beginning of
period 469 454 465 439 Opened during the period 3 7 9 10 Acquired
from franchisees — — — 13 Closed during the period — (1 ) (2
) (2 ) End of period 472 460 472 460
Franchised: Beginning of period 87 86 86 99 Opened during the
period — — 1 — Sold or closed during the period (1 ) — (1 )
(13 ) End of period 86 86 86 86 Total
number of restaurants 558 546 558 546
Balance Sheet and Liquidity
As of July 9, 2017, the Company had cash and cash
equivalents of $20.2 million and total debt of $280.1 million,
excluding $11.1 million of capital lease liabilities. The Company
funded construction of new restaurants and other capital
expenditures with cash flow from operations and made net repayments
of $20.8 million on its credit facility during the second quarter
of 2017. As of July 9, 2017, the Company had outstanding
borrowings under its credit facility of $279.3 million, in
addition to amounts issued under letters of credit of $7.6
million, which reduce the amount available under its credit
facility but are not recorded as debt.
The Company’s lease adjusted leverage ratio decreased to 4.18x
as of July 9, 2017. The lease adjusted leverage ratio is
defined in Section 1.1 of our credit facility, which is filed as
Exhibit 10.32 of our Annual Report on Form 10-K filed on February
21, 2017.
Outlook for 2017
- Earnings per diluted share is projected
to range from $0.20 to $0.30 for the third quarter and will
approximate the low end of the $2.80 to $3.10 guidance for
full-year 2017.
- Cost of sales, as a percentage of
restaurant revenue, is projected to be in the range of down 25
basis points to up 25 basis points versus 2016 due to the impact of
higher beef and potato prices in the second half of the year.
- Restaurant labor costs, as a percentage
of restaurant revenue, are projected to range from flat to an
increase of 50 basis points compared to 2016, driven by minimum
wage increases in more highly penetrated markets, higher benefit
costs and restaurant manager bonuses, partially offset by the
effect of pricing and improvements in labor productivity.
- General and administrative expense is
expected to be slightly less than the Company’s original estimate
of $100 million.
- Tax rate is projected to be in the
range of 15% to 20%.
The sensitivity of the Company’s earnings per diluted share to a
1% change in guest counts for fiscal year 2017 is estimated to be
approximately $0.40 on an annualized basis. Additionally, a 10
basis point change in restaurant-level operating profit margin is
expected to impact earnings per diluted share by approximately
$0.10, and a change of approximately $160,000 in pre-tax income or
expense is equivalent to approximately $0.01 per diluted share.
Guidance Policy
The Company provides only annual guidance as it relates to
revenues, comparable restaurant revenue growth, operating weeks
associated with locations opened, cost of sales and restaurant
labor costs as a percentage of restaurant revenue, other operating
expenses (other than interest expense), depreciation and
amortization, general and administrative expense, selling expense,
pre-opening expense, income tax rate, EBITDA, earnings per diluted
share, overall capital expenditures and restaurant openings and
closings. The Company intends to only provide updates if there is a
material change versus the previously communicated guidance.
Investor Conference Call and Webcast
Red Robin will host an investor conference call to discuss its
second quarter 2017 results today at 5:00 p.m. ET. The conference
call number is (888) 576-4397, or for international callers (719)
325-2168. The financial information that the Company intends to
discuss during the conference call is included in this press
release and will be available in the “Company” section of the
Company’s website at www.redrobin.com by selecting the “Investor
Relations” link, then the “News Releases” link. Prior to the
conference call, the Company will post supplemental financial
information that will be discussed during the call and live
webcast.
To access the supplemental financial information and webcast,
please visit www.redrobin.com and select the “Company” section,
then the “Investor Relations” link, then the “Presentations” link.
A replay of the live conference call will be available from two
hours after the call until midnight on Tuesday, August 15, 2017.
The replay can be accessed by dialing (844) 512-2921, or (412)
317-6671 for international callers. The conference ID is
3188794.
About Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)
Red Robin Gourmet Burgers, Inc. (www.redrobin.com), 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, is
the Gourmet Burger Authority™, famous for serving more than two
dozen craveable, high-quality burgers with Bottomless Steak
Fries® in a fun environment welcoming to guests of all
ages. Whether a family dining with kids, adults grabbing a
drink at the bar, or teens enjoying a meal, Red Robin offers an
unparalleled experience for its guests. In addition to its
many burger offerings, Red Robin serves a wide variety of salads,
soups, appetizers, entrees, desserts, and signature
beverages. Red Robin offers a variety of options behind the
bar, including its extensive selection of local and regional beers,
and innovative adult beer shakes and cocktails, earning the
restaurant a VIBE Vista Award for Best Beer Program in a
Multi-Unit Chain Restaurant. There are more than 560 Red Robin
restaurants across the United States and Canada,
including locations operating under franchise agreements. Red
Robin… YUMMM®! Connect with Red Robin on Facebook, Instagram, and
Twitter.
Forward-Looking Statements
Forward-looking statements in this press release regarding the
Company’s future performance, revenues and timing thereof, tax
rate, sensitivity of earnings per share and other projected
financial measures, statements under the heading “Outlook for
2017”, 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,” “will” 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 business improvement initiatives;
the ability to fulfill planned, and realize the anticipated
benefits of completed, expansion and restaurant remodeling; the
effectiveness of our marketing strategies and initiatives to
achieve restaurant sales growth; the cost and availability of key
food products, labor, and energy; the ability to achieve
anticipated revenue and cost savings from anticipated new
technology systems and tools in the restaurants and other
initiatives; the ability to develop, test, implement and increase
online ordering, to-go services, catering and other off-premise
sales; availability of capital or credit facility borrowings; the
adequacy of cash flows or available debt resources to fund
operations and growth opportunities; federal, state, and local
regulation of the Company’s business; 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.
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, 2017 July 10, 2016
July 9, 2017 July 10, 2016 Revenues:
Restaurant revenue $ 312,351 $ 302,117 $ 725,802 $
698,887
Franchise royalties, fees and other revenue 3,420 3,432
8,526 8,788 Total revenues 315,771
305,549 734,328 707,675 Costs and
expenses:
Restaurant operating costs (exclusive of
depreciation and amortization shown separately below):
Cost of sales 73,903 70,831 168,510 163,156 Labor 108,422 102,847
253,941 235,831 Other operating 42,712 40,275 97,392 89,983
Occupancy 25,140 24,905 58,259 57,403 Depreciation and amortization
21,173 19,159 49,217 43,110 General and administrative 21,927
19,972 52,840 51,952 Selling 10,167 11,047 22,529 22,455
Pre-opening and acquisition costs 1,377 2,238 3,232 4,610 Other
charges(1) 1,584 3,860 1,584 8,585
Total costs and expenses 306,405 295,134 707,504
677,085 Income from operations 9,366 10,415
26,824 30,590 Other expense: Interest expense, net and other
2,453 1,486 5,437 3,124 Income
before income taxes 6,913 8,929 21,387 27,466 Provision (benefit)
for income taxes (18 ) 1,377 2,889 5,689 Net
income $ 6,931 $ 7,552 $ 18,498 $ 21,777
Earnings per share: Basic $ 0.54 $ 0.56 $ 1.44
$ 1.60 Diluted $ 0.53 $ 0.55 $ 1.43
$ 1.59 Weighted average shares outstanding: Basic
12,896 13,511 12,872 13,582 Diluted 13,008 13,644 12,971
13,724
(1) Certain amounts presented in prior periods have been
reclassified to conform with the current period presentation. For
the twelve weeks ended July 10, 2016, the Company reclassified
impairment charges of $3.9 million from Asset impairment to Other
charges on the condensed consolidated statement of operations. For
the twenty-eight weeks ended July 10, 2016, the Company
reclassified impairment charges of $4.7 million from Asset
impairment and litigation contingencies of $3.9 million from
Selling, general, and administrative expenses to Other charges on
the condensed consolidated statement of operations. Management
believes separating these special items on the condensed
consolidated statement of operations provides more clarity of the
Company’s ongoing operating performance and a more relevant
comparison to prior period results.
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except per share
amounts)
(Unaudited)
July 9, 2017
December 25, 2016 Assets: Current Assets: Cash and
cash equivalents $ 20,179 $ 11,732 Accounts receivable, net 12,929
24,166 Inventories 29,547 29,899 Prepaid expenses and other current
assets 22,859 27,049 Total current assets 85,514
92,846 Property and equipment, net 651,166
656,439 Goodwill 96,617 95,935 Intangible assets, net 40,670 42,270
Other assets, net 29,209 31,055 Total assets $
903,176 $ 918,545
Liabilities and
Stockholders’ Equity: Current Liabilities: Trade accounts
payable $ 19,784 $ 13,740 Construction related payables 14,709
12,862 Accrued payroll and payroll related liabilities 41,261
34,703 Unearned revenue 38,873 50,199 Accrued liabilities and other
41,912 29,505 Total current liabilities 156,539
141,009 Deferred rent 73,699 72,431 Long-term
debt 280,125 336,375 Long-term portion of capital lease obligations
10,461 10,805 Other non-current liabilities 10,075 9,872
Total liabilities 530,899 570,492
Stockholders’ Equity: Common stock; $0.001 par value: 45,000 shares
authorized; 17,851 and 17,851 shares issued; 12,934 and 12,828
shares outstanding 18 18 Preferred stock, $0.001 par value: 3,000
shares authorized; no shares issued and outstanding — — Treasury
stock 4,917 and 5,023 shares, at cost (203,330 ) (207,720 ) Paid-in
capital 208,391 208,022 Accumulated other loss, net of tax (4,041 )
(5,008 ) Retained earnings 371,239 352,741 Total
stockholders’ equity 372,277 348,053 Total
liabilities and stockholders’ equity $ 903,176 $ 918,545
Schedule I
Reconciliation of Non-GAAP Results to GAAP
Results(In thousands, except per share data)
In addition to the results provided in accordance with Generally
Accepted Accounting Principles (“GAAP”) throughout this press
release, the Company has provided non-GAAP measurements which
present the 12 and 28 weeks ended July 9, 2017 and July 10, 2016,
net income and basic and diluted earnings per share, excluding the
effects of litigation contingencies, asset impairment, and the
related income tax effects. The Company believes the presentation
of net income and earnings per share exclusive of the identified
item gives the reader additional insight into the ongoing
operational results of the Company. This supplemental information
will assist with comparisons of past and future financial results
against the present financial results presented herein. Income tax
expense related to the change in accounting estimate 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, 2017 July 10, 2016 July
9, 2017 July 10, 2016 Net income as reported $
6,931 $ 7,552 $ 18,498 $ 21,777 Asset impairment 1,584 3,860 1,584
4,685 Litigation contingencies — — — 3,900 Income tax effect of
reconciling items (618 ) (1,153 ) (618 ) (2,509 ) Adjusted net
income $ 7,897 $ 10,259 $ 19,464 $ 27,853
Basic net income per share: Net income as reported $
0.54 $ 0.56 $ 1.44 $ 1.60 Asset impairment 0.12 0.29 0.12 0.34
Litigation contingencies — — — 0.29 Income tax effect of
reconciling items (0.05 ) (0.09 ) (0.05 ) (0.18 ) Adjusted earnings
per share - basic $ 0.61 $ 0.76 $ 1.51 $ 2.05
Diluted net income per share: Net income as reported
$ 0.53 $ 0.55 $ 1.43 $ 1.59 Asset impairment 0.12 0.28 0.12 0.34
Litigation contingencies — — — 0.28 Income tax effect of
reconciling items (0.04 ) (0.08 ) (0.05 ) (0.18 ) Adjusted earnings
per share - diluted $ 0.61 $ 0.75 $ 1.50 $
2.03 Weighted average shares outstanding Basic 12,896
13,511 12,872 13,582 Diluted 13,008 13,644 12,971 13,724
Schedule II
Reconciliation of Non-GAAP Restaurant-Level
Operating Profit to Incomefrom Operations and Net
Income(In thousands)
The Company believes that 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 restaurant revenue minus restaurant-level operating costs,
excluding restaurant impairment and closure costs. The measure
includes restaurant-level occupancy costs, which 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 related to
restaurant buildings and leasehold improvements. The measure
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, general, and administrative costs, and therefore excludes
occupancy costs associated with selling, general, and
administrative functions, and pre-opening costs. The Company
excludes restaurant closure costs as they do not represent a
component of the efficiency of continuing operations. Restaurant
impairment costs are excluded, because, similar to depreciation and
amortization, they represent a non-cash charge for the Company’s
investment in its restaurants and not a component of the efficiency
of restaurant operations. 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 as indicators of financial performance.
Restaurant-level operating profit as presented may not be
comparable to other similarly titled measures of other companies in
our industry. The table below sets forth certain unaudited
information for the 12 and 28 weeks ended July 9, 2017 and July 10,
2016, expressed as a percentage of total revenues, except for the
components of restaurant-level operating profit, which are
expressed as a percentage of restaurant revenue.
Twelve Weeks Ended Twenty-eight Weeks
Ended July 9, 2017 July 10, 2016 July
9, 2017 July 10, 2016 Restaurant revenue $
312,351 98.9 % $ 302,117 98.9 % $ 725,802
98.8 % $ 698,887 98.8 % Restaurant
operating costs (1): Cost of sales 73,903 23.7 % 70,831 23.4 %
168,510 23.2 % 163,156 23.3 % Labor 108,422 34.7 % 102,847 34.0 %
253,941 35.0 % 235,831 33.7 % Other operating 42,712 13.7 % 40,275
13.4 % 97,392 13.4 % 89,983 13.0 % Occupancy 25,140
8.0 % 24,905 8.3 % 58,259 8.0 % 57,403
8.2 % Restaurant-level operating profit 62,174
19.9 % 63,259 20.9 % 147,700
20.3 % 152,514 21.8 % Add – Franchise
royalties, fees and other revenue 3,420 1.1 % 3,432 1.1 % 8,526 1.2
% 8,788 1.2 % Deduct – other operating: Depreciation and
amortization 21,173 6.7 % 19,159 6.3 % 49,217 6.7 % 43,110 6.1 %
General and administrative expenses 21,927 6.9 % 19,972 6.5 %
52,840 7.2 % 51,952 7.3 % Selling 10,167 3.2 % 11,047 3.6 % 22,529
3.1 % 22,455 3.2 % Pre-opening & acquisition costs 1,377 0.4 %
2,238 0.7 % 3,232 0.4 % 4,610 0.7 % Other charges 1,584
0.5 % 3,860 1.3 % 1,584 0.2 %
8,585 1.2 % Total other operating 56,228
17.8 % 56,276 18.4 % 129,402
17.6 % 130,712 18.6 % Income from operations
9,366 3.0 % 10,415 3.4 % 26,824 3.7 % 30,590 4.3 % Interest
expense, net and other 2,453 0.8 % 1,486 0.5 % 5,437 0.7 % 3,124
0.4 % Income tax expense (benefit) (18 ) (0.0 )% 1,377
0.4 % 2,889 0.4 % 5,689
0.8 % Total other 2,435 0.8 % 2,863 0.9
% 8,326 1.1 % 8,813 1.2 % Net
income $ 6,931 2.2 % $ 7,552 2.5 %
18,498 2.5 % 21,777 3.1 %
(1) Excluding depreciation and
amortization, which is shown separately.
Certain percentage amounts in the table above do not total due
to rounding as well as the fact that components of restaurant-level
operating profit are expressed as a percentage of restaurant
revenue and not total revenues.
Schedule III
Reconciliation of Net Income to EBITDA and
Adjusted EBITDA(In thousands, unaudited)
The Company defines EBITDA as net income before interest
expense, provision for income taxes, and depreciation and
amortization. EBITDA and adjusted EBITDA are presented because the
Company believes that investors’ understanding of our performance
is enhanced by including these non-GAAP financial measures as a
reasonable basis for evaluating our ongoing results of operations
without the effect of non-cash charges such as depreciation and
amortization expenses, asset disposals, and asset impairment and
restaurant closure charges. EBITDA and adjusted EBITDA are
supplemental measures of operating performance that do not
represent and should not be considered as alternatives to net
income or cash flow from operations, as determined by GAAP, and our
calculation thereof may not be comparable to that reported by other
companies in our industry or otherwise. Adjusted EBITDA further
adjusts EBITDA to reflect the additions and eliminations shown in
the table below. The use of adjusted EBITDA as a performance
measure permits a comparative assessment of our operating
performance relative to our performance based on our GAAP results,
while isolating the effects of some items that vary from period to
period without any correlation to core operating performance.
Adjusted EBITDA as presented may not be comparable to other
similarly-titled measures of other companies, and our presentation
of adjusted EBITDA should not be construed as an inference that our
future results will be unaffected by excluded or unusual items. We
have not provided a reconciliation of our adjusted EBITDA outlook
to the most comparable GAAP measure of net income. Providing net
income 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 net income, including
asset impairments and income tax valuation adjustments. The
reconciliations of adjusted EBITDA to net income for the historical
periods presented below are indicative of the reconciliations that
will be prepared upon completion of the periods covered by the
non-GAAP guidance.
Twelve Weeks Ended Twenty-eight
Weeks Ended July 9, 2017 July 10, 2016
July 9, 2017 July 10, 2016 Net income as
reported $ 6,931 $ 7,552 $ 18,498 $
21,777
Interest expense, net 2,626 1,555 5,875 3,210 Provision (benefit)
for income taxes (18 ) 1,377 2,889 5,689 Depreciation and
amortization 21,173 19,159 49,217 43,110
EBITDA(1) 30,712 29,643 76,479 73,786
Asset impairment 1,584 3,860 1,584 4,685 Litigation
contingencies — — — 3,900 Adjusted
EBITDA $ 32,296 $ 33,503 $ 78,063 $ 82,371
(1) EBITDA for the twelve and twenty-eight weeks ended
July 10, 2016 was previously reported as $30.6 million and
$76.9 million. To conform with current period presentation and to
provide an EBITDA measure comparable to other companies in our
industry, $1.0 million and $3.1 million of stock-based compensation
is included in EBITDA for these prior periods.
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For media relations questions:Coyne PRBrian Farley,
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Gross/Dara Dierks203-682-8200
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