Red Robin Gourmet Burgers Provides Business and Operational Update Related to COVID-19
April 01 2020 - 07:00AM
Business Wire
Continuing to Serve Guests with To-Go, Delivery
and Catering Options
Bolsters the Company’s Liquidity Position by
Drawing Remaining Capacity of Credit Facility
Withdraws Prior 2020 and Long-Term Outlook Due
to COVID-19 Impact
Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) (“Red Robin” or
the “Company”) today announced several measures it is taking in
response to the escalating COVID-19 pandemic.
Paul J.B. Murphy III, Red Robin’s President and Chief Executive
Officer, said, “We are navigating an unprecedented time for our
business, industry and country as we collectively work to combat
the global COVID-19 crisis. With the health, safety, and well-being
of Red Robin’s Team Members, Guests and communities as our top
priority, we have shifted our restaurants to an off-premise model
and are strictly adhering to CDC, state and local guidelines.”
Murphy added, “We are encouraged by our continuing off-premise
sales momentum, which has more than doubled over the past two weeks
compared to our trends before the impact of COVID-19. This will
help mitigate the decline in comparable restaurant revenues due to
the closure of dine-in services at substantially all Red
Robin-operated restaurants and enable us to focus on optimizing the
execution of our off-premise channels both during and following the
crisis. Thanks to the tireless work of our great Team Members, we
are grateful we can continue serving our Guests with to-go,
delivery and catering options and providing convenient meal
solutions during this unprecedented time.”
Business & Outlook Update
To preserve liquidity, enhance financial flexibility and help
mitigate the impact of COVID-19, Red Robin has taken or is taking
the following decisive actions:
- Temporarily closed dine-in services at substantially all Red
Robin-operated restaurants while continuing to provide to-go,
delivery and catering choices and ensuring the continuity of the
Company’s supply chain;
- Implemented enhanced health and safety protocols across the
business, emergency sick pay for hourly Team Members and
telecommuting policies for nearly all corporate level
employees;
- Meaningfully reduced restaurant level costs and selling,
general and administrative expenses, including reducing executive
base salaries by twenty percent, effective March 30, 2020, and
reducing Board member cash retainer fees by twenty percent, while
continuing to market off-premise opportunities primarily through
digital channels;
- Postponing or eliminating all non-essential spending, including
capital expenditures for previously planned growth and other
projects, including the Company’s continued rollout of Donato’s,
restaurant refreshes and IT projects;
- Drew down remaining capacity under the Company’s $300 million
credit facility, bringing Red Robin’s cash balance to more than $91
million as of the end of our last fiscal week on March 29, 2020;
and
- Suspended share repurchases and terminated the Company’s
pre-arranged stock trading plan under Rule 10b5-1 of the Securities
Exchange Act of 1934, as amended.
In light of the ongoing uncertainty regarding the duration and
impact of the COVID-19 pandemic, Red Robin is withdrawing its 2020
and long-term financial outlook. The Company is currently in its
fiscal first quarter, which ends on April 19, 2020.
Murphy concluded, “We are confident the actions we are taking
will ultimately provide us ample liquidity and allow Red Robin to
emerge in an even stronger position when the recovery begins. We
look forward to resuming normal operations at the appropriate time
and continuing the execution of our strategic plan to drive
long-term growth and value-creation for our shareholders and other
stakeholders. On behalf of Red Robin’s entire leadership and Board,
I want to thank our hard-working teams for their dedication in
delivering our brand promise while staying vigilant in their
commitment to health and safety and serving the needs of our
communities under these most trying conditions.”
About Red Robin
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. At Red Robin,
burgers are more than just something guests eat; they’re a bonding
experience that brings together friends and families, kids and
adults. 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 cocktails. It’s now easy to take Red Robin anywhere with
online ordering for to-go and Gourmet Burger Bar catering pickups
through Yummm2Go. There are more than 550 Red Robin restaurants
across the United States and Canada, including those 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 are made under
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements include, without limitation,
statements regarding the impact of COVID-19 on the Company’s
business, the ability of the Company’s restaurants to operate on an
a substantially all off-premise model, additional measures to
further preserve financial flexibility, adherence to the guidance
of the CDC and local health departments, further strengthening of
the Company’s liquidity position and the Company’s ability to
overcome near-term operating conditions and be better positioned
for the long term. 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 rapidly
evolving nature of the COVID-19 outbreak and related containment
measures, including the potential for a complete shutdown of
Company and franchised restaurants; economic, public health, and
political conditions that impact consumer confidence and spending,
including the impact of COVID-19 and other health epidemics or
pandemics on the global economy; changes in unemployment rates;
changes in laws impacting the Company’s business, including
increases in minimum wages and benefit costs; the economic health
of the Company’s landlords and other tenants in retail centers in
which its restaurants are located; the economic health of
suppliers, licensees, vendors, and other third parties providing
goods or services to the Company; the ability to continue to
increase off-premise sales; the effectiveness of the Company’s
marketing strategies and promotions and menu changes; the ability
to achieve significant cost savings; the cost and availability of
key food products, distribution, labor, and energy; the
effectiveness of the Company’s long term strategic initiatives; the
cost and availability of capital or credit facility borrowings; the
adequacy of cash flows or available debt resources to fund
operations; the impact of 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200401005178/en/
ICR Raphael Gross, Managing Director (203) 682-8253
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