Company announces all Company-owned indoor
dining rooms open with varying levels of capacity, 10.0% comparable
revenue growth, improved first quarter trends
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 quarter ended April 18, 2021.
Key Highlights
- As of the end of our fiscal fifth period, all Company-owned
restaurants have re-opened indoor dining rooms with varying levels
of capacity;
- Restaurant revenue of $318.7 million and Restaurant Level
Operating Profit (a non-GAAP metric) of 15.7%, an increase of 690
basis points over the same period in 2020;
- First quarter 2021 comparable(1) restaurant revenue increased
10.0% over the same period in 2020, and decreased 12.8% compared to
the same period in 2019;
- At the end of the first quarter 2021, 55% of Company-owned
restaurants had positive comparable(1) restaurant revenue compared
to 2019;
- First quarter 2021 off-premises sales increased 75.5% compared
to the period ended April 19, 2020, and comprised 41.7%, 26.3%, and
11.6% of total food and beverage sales for the first fiscal quarter
of 2021, 2020, and 2019; and,
- For the last four weeks of the fiscal first quarter of 2021, 85
comparable(1) Company-owned restaurants with no capacity or social
distancing restrictions realized comparable restaurant revenue of
5.2% over the same period in 2019, while maintaining off-premises
mix of 29.9%, more than double pre-pandemic levels. These
restaurants also realized comparable(1) restaurant margin of 21.1%,
an increase of 1.5% over the same period in 2019. While these
restaurants are able to operate with no restrictions, several are
still operating below 100% capacity due to limited operating hours
due to staffing challenges and COVID exclusions.
Paul J. B. Murphy III, Red Robin’s President and Chief Executive
Officer, said, "We are very excited to share the progress we have
made towards recovery. Our initiatives to enhance the Red Robin
Guest experience and enterprise business model since the onset of
the pandemic, coupled with decreasing COVID cases and pent-up
demand, have resulted in a meaningful improvement in our liquidity
and enterprise margins. We are encouraged that by the end of our
first fiscal quarter, more than half of our Company-owned
restaurants had positive comparable restaurant revenue compared to
2019, despite pronounced capacity restrictions in our largest
markets. For the first time since the beginning of the pandemic,
all of our Company-owned restaurants are open for indoor dining at
varying levels of capacity. As we welcome back our Guests, we are
sustaining off-premises sales that are more than double
pre-pandemic levels, even in comparable Company-owned restaurants
we are able to operate at full indoor capacity."
Murphy continued, "We believe the foundation that we have put in
place will drive Guest activation, deliver a great brand
experience, continue to generate incremental off-premises sales,
and leverage our strengthened business model, together creating
long-term value for our shareholders."
First Quarter 2021 Financial Summary Compared to First
Quarter 2020 and 2019
The following table presents financial highlights for the fiscal
first quarter of 2021, compared to results from the same period in
2020 and 2019:
Sixteen weeks ended
Sixteen weeks ended
April 18, 2021
April 19, 2020
Change
April 21, 2019(1)
Change
Total revenues (millions)
$
326.3
$
306.1
6.6
%
$
409.9
(20.4)
%
Net (loss) income (millions)
(8.7)
(174.3)
(95.0)
%
0.6
*
Adjusted EBITDA (millions)(2)
$
27.4
$
(10.7)
*
$
34.3
(20.2)
%
(Loss) income per diluted share ($ per
share)
$
(0.56)
$
(13.51)
(95.9)
%
$
0.05
*
Adjusted (loss) income per diluted share
($ per share)(3)
$
(0.30)
$
(6.66)
(95.5)
%
$
0.19
*
(1)
Presented for improved comparability.
(2)
See schedule III for a reconciliation of
Adjusted EBITDA, a non-GAAP measure, to net (loss) income.
(3)
See schedule II for a reconciliation of
Adjusted (loss) income per diluted share, a non-GAAP measure, to
(Loss) income per diluted share.
*
Percentage increases and decreases over
100 percent were not considered meaningful.
First Quarter 2021 Operating Results
Comparable restaurant revenue(1) increased 10.0% in the first
quarter of 2021 compared to the same period a year ago, driven by a
4.4% increase in Guest count and a 5.6% increase in average Guest
check. The increase in average Guest check resulted from a 3.7%
increase in pricing, a 1.3% increase in menu mix, and a 0.6%
increase from lower discounts. The increase in menu mix was
primarily driven by higher sales of appetizers and Gourmet burgers,
partially offset by lower beverage mix. Comparable restaurant
revenue(1) decreased 12.8% in the first quarter of 2021 compared to
the same period of fiscal year 2019.
(1)
Comparable restaurants are those
Company-owned restaurants that have operated five full quarters as
of the end of the period presented, and such restaurants are only
included in the comparable metrics if they have operated for the
entirety of both periods presented.
Sixteen Weeks Ended
April 18, 2021
April 19, 2020
Average weekly sales per unit:
Company-owned – Total
$
46,515
$
41,785
Company-owned – Comparable(1)
47,535
43,062
Franchised units – Comparable(1)
$
50,240
$
43,647
Total operating weeks:
Company-owned units
6,851
7,214
Franchised units
1,648
1,632
(1)
Comparable restaurants are those
Company-owned restaurants that have operated five full quarters as
of the end of the period presented, and such restaurants are only
included in the comparable metrics if they have operated for the
entirety of both periods presented.
Sixteen weeks ended
April 18, 2021
April 19, 2020
April 21, 2019(1)
Restaurant level operating profit(2)
(millions)
50.0
26.5
73.3
Restaurant level operating profit
percentage(2)
15.7
%
8.8
%
18.3
%
(1)
Presented for improved comparability.
(2)
See schedule II for a reconciliation of
Restaurant level operating profit, a non-GAAP measure, to Loss from
operations.
The increase in restaurant-level operating profit was due to the
following:
- Restaurant revenue increased by 5.7 %, driven by favorable
Guest counts, pricing, and sales mix;
- Cost of goods sold decreased by 170 basis points, primarily
driven by favorable commodity costs and rebates;
- Labor costs decreased by 430 basis points, primarily driven by
a more efficient management labor structure, staffing shortages,
and simplifying our menu resulting in reduced kitchen labor hours,
partially offset by higher wage rates;
- Other operating expenses increased by 80 basis points,
primarily driven by higher third party delivery commissions and
supply costs, due to higher off-premises sales; and
- Occupancy costs decreased by 180 basis points, primarily driven
by savings from permanently closed restaurants and restructuring of
lease payments and rent concessions.
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 loss from operations and
net loss, the most directly comparable GAAP metrics.
Sixteen weeks ended
April 18, 2021
April 19, 2020
April 21, 2019(1)
General and administrative costs
(millions)
$
22.3
$
26.7
$
30.1
General and administrative costs as a
percentage of total revenues
6.8
%
8.7
%
7.3
%
(1) Presented for improved comparability.
The decrease in general and administrative costs in 2021 was
primarily driven by a decrease in travel and entertainment costs
and a permanent reduction in force in 2020, partially offset by
higher Team Member benefit costs.
Sixteen weeks ended
April 18, 2021
April 19, 2020
April 21, 2019(1)
Selling costs (millions)
$
8.4
$
14.8
$
18.0
Selling costs as a percentage of total
revenues
2.6
%
4.8
%
4.4
%
(1) Presented for improved comparability.
The decrease in selling costs in 2021 was primarily driven by
reduced marketing due to capacity limitations and a shift to an
all-digital marketing strategy, which has enabled us to communicate
with our Guests in a more compelling and cost effective way.
Balance Sheet and Liquidity
The Company made net repayments of $6.4 million on its Amended
and Restated Credit Agreement (the "credit facility") during the
first quarter of 2021. As of April 18, 2021, the Company had
outstanding borrowings under its credit facility of $163.3 million,
in addition to amounts issued under letters of credit of $8.6
million, and liquidity of approximately $107.0 million including
cash on hand and available borrowing capacity under its credit
facility.
Income Taxes
The Company will be able to carry back federal and state net
operating losses that are expected to generate approximately $16
million in cash tax refunds during 2021.
Restaurant Portfolio
The following table details restaurant unit data for
Company-owned and franchised locations for the periods
indicated:
Sixteen Weeks Ended
April 18, 2021
April 19, 2020
Company-owned:
Beginning of period
443
454
Closed during the period
(3)
(2)
End of period
440
452
Franchised:
Beginning of period
103
102
End of period
103
102
Total number of restaurants
543
554
As of May 16, 2021, the Company had 440 total (comparable and
non-comparable) restaurants. In addition to the permanent closures
shown in the table above, the Company determined during the first
quarter that it intends to permanently close 10 of 12 remaining
Company-owned restaurants that were closed in 2020 due to the
COVID-19 pandemic and will re-open the remaining two restaurants in
2021.
Current Operational Trends
Selected operating metrics are presented below for the Company's
28 day accounting periods through the fifth period of fiscal year
2021:
Period Ended(2)
Company-owned Restaurants
24-Jan
21-Feb(3)
21-Mar
18-Apr
16-May(6)
Net comparable(1) restaurant revenues
(26.7)%
(22.9)%
21.9%
165.9%
102.6%
Net comparable(1) restaurant revenues
compared to Fiscal Year 2019
N/A(4)
N/A(4)
(8.5)%
0.0%
(3.3)%
Average weekly net sales per
restaurant
$
39,701
$
41,384
$
53,240
$
55,600
$
52,731
Number of comparable Company-owned
restaurants(1)
413
411
410
410
410
Company-owned restaurants with closed
dining rooms(1)
114
57
9
6
0
Average weekly off-premises net sales per
restaurant
$
20,896
$
18,696
$
20,056
$
19,894
$
19,078
Open system capacity(5)
40%
41%
48%
61%
65%
(1)
Comparable restaurants are those
Company-owned restaurants that have operated five full fiscal
quarters as of the period presented. Restaurant count shown is as
of the end of the period presented.
(2)
The periods ended January 24, February 21,
March 21, and April 18, 2021 comprise the Company's first fiscal
quarter. The period ended May 16, 2021 falls within our second
fiscal quarter of 2021, and amounts presented for the period are
preliminary and subject to closing adjustments.
(3)
Period includes the impact of reduced
traffic due to winter weather in February of approximately 2% to
3%.
(4)
This metric is presented to compare
current year operating results to periods that are not impacted by
the COVID-19 pandemic. There was no meaningful COVID-19 impact in
P1 or P2 of 2020.
(5)
Represents the percentage of indoor
seating of Company-owned restaurants with open dining rooms, as of
the end of the period presented.
(6)
Period includes the impact of limited
operating hours, in part due to staffing shortages.
We expect that the recovery of our restaurants in our largest
markets on the West Coast, which have had capacity restrictions at
50% or less through May 16, 2021, will provide significant average
comparable restaurant revenue benefits as we increase capacity in
these dining rooms. As of the end of our fiscal first quarter, the
majority of our restaurants in our West Coast market were open at
limited indoor capacity. The restaurants in these states had
average weekly net sales per restaurant as presented in the table
below:
State
Restaurant Count
Sixteen weeks ended April 18,
2021
May 16, 2021(1)
Fiscal Year 2019
First Quarter 2021 to Fiscal
Year 2019 Change
Period Ended May 16, 2021 to
Fiscal Year 2019 Change(1)
California
64
$44,592
$
64,735
$63,586
(29.9)
%
1.8
%
Oregon
15
$53,784
$
57,710
$70,119
(23.3)
%
(17.7)
%(2)
Washington
38
$59,888
$
75,175
$73,326
(18.3)
%
2.5
%
(1)
Amounts presented for this period are
preliminary and subject to closing adjustments.
(2)
During our fiscal fifth period ended May
16, 2021, certain restaurants in Oregon were mandated to revert to
off-premises only due to increased COVID-19 restrictions in these
states and localities.
We also expect to see continued benefits from outdoor seating
expansion, allowing us to capture incremental demand by offering a
Red Robin occasion to Guests who would still prefer a more socially
distanced full service dining option, or outdoor dining experiences
during seasons with good weather.
Outlook for 2021 and Guidance Policy
The Company provides guidance as it relates to select
information related to the Company's financial and operating
performance, and such measures may differ from year to year. Due to
the uncertainty caused by the on-going COVID-19 pandemic, limited
guidance is being provided for fiscal year 2021.
The Company currently expects the following in 2021:
- We reiterate our expectation of full-year capital expenditures
of $45 million to $55 million, including continued investment in
maintaining our restaurants and infrastructure with maintenance and
systems capital, Donatos® expansion to approximately 120
restaurants, including approximately 40 restaurants in our second
fiscal quarter, and approximately 80 restaurants in the second half
of the fiscal year, digital guest and operational technology
solutions, and off-premises execution enhancements.
- We currently expect to realize a full-year 2021 effective tax
rate between 1% and 5%.
Investor Conference Call and Webcast
Red Robin will host an investor conference call to discuss its
first quarter 2021 results today at 5:00 p.m. ET. The conference
call can be accessed live over the phone by dialing (412) 317-6026.
A replay will be available from approximately two hours after the
end of the call and can be accessed by dialing (412) 317-6671; the
conference ID is 10155328. The replay will be available through
Tuesday, June 1, 2021.
The call will be webcast live and later archived from the
Company's website at www.redrobin.com under the investor relations
section.
About 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. There are more than 540 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, demand and business recovery, growth
drivers, long-term value creation, revenue and comparable revenue
growth, sales and profitability including sales trajectory,
off-premises sales and incrementality, enterprise margin
improvement, preliminary results including net comparable
restaurant revenue and average weekly net sales per restaurant, tax
rate and NOL cash tax refunds, capital expenditures including
restaurant maintenance and infrastructure and rollout of Donatos®
to additional locations and timing thereof, digital guest and
operational technology solutions, and off-premises execution
enhancements, commodity 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," 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 impact
of COVID-19 on our results of operations, supply chain, and
liquidity; the effectiveness of the Company's strategic
initiatives, including alternative labor models, service, and
operational improvement initiatives; our ability to staff, train,
and retain our workforce for service execution; 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; 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 cost and availability of key food products,
distribution, labor, and energy; general economic conditions,
including changes in consumer disposable income, weather
conditions, and related events in regions where our restaurants are
operated; the adequacy of cash flows and the cost and availability
of capital or credit facility borrowings; the impact of federal,
state, and local regulation of the Company's business; changes in
federal, state, or local laws and regulations affecting the
operation of our restaurants, including minimum wages, consumer
health and safety, health insurance coverage, 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; 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)
Sixteen Weeks Ended
April 18, 2021
April 19, 2020
Revenues:
Restaurant revenue
$
318,677
$
301,434
Franchise royalties, fees, and other
revenue
7,598
4,631
Total revenues
326,275
306,065
Costs and expenses:
Restaurant operating costs (exclusive of
depreciation
and amortization shown separately
below):
Cost of sales
69,166
70,426
Labor
111,659
118,566
Other operating
57,712
52,291
Occupancy
30,100
33,657
Depreciation and amortization
25,888
28,320
General and administrative
22,255
26,723
Selling
8,355
14,779
Pre-opening costs and acquisition
costs
—
153
Other charges
5,471
119,379
Total costs and expenses
330,606
464,294
Loss from operations
(4,331)
(158,229)
Other expense:
Interest expense, net and other
4,330
3,370
Loss before income taxes
(8,661)
(161,599)
Income tax provision
52
12,699
Net loss
$
(8,713)
$
(174,298)
Loss per share:
Basic
$
(0.56)
$
(13.51)
Diluted
$
(0.56)
$
(13.51)
Weighted average shares outstanding:
Basic
15,579
12,903
Diluted
15,579
12,903
RED ROBIN GOURMET BURGERS,
INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except
per share amounts)
(Unaudited)
April 18, 2021
December 27, 2020
Assets:
Current Assets:
Cash and cash equivalents
$
22,284
$
16,116
Accounts receivable, net
10,916
16,510
Inventories
23,736
23,802
Income tax receivable
16,176
16,662
Prepaid expenses and other current
assets
12,823
13,818
Total current assets
85,935
86,908
Property and equipment, net
405,157
427,033
Right of use assets, net
427,182
425,573
Intangible assets, net
23,741
24,714
Other assets, net
9,122
10,511
Total assets
$
951,137
$
974,739
Liabilities and Stockholders'
Equity:
Current Liabilities:
Accounts payable
$
25,520
$
20,179
Accrued payroll and payroll related
liabilities
30,090
27,653
Unearned revenue
42,996
50,138
Current portion of lease obligations
51,369
55,275
Current portion of long-term debt
9,692
9,692
Accrued liabilities and other
44,524
39,617
Total current liabilities
204,191
202,554
Long-term debt
154,529
160,952
Long-term portion of lease obligations
463,729
465,233
Other non-current liabilities
16,402
25,287
Total liabilities
838,851
854,026
Stockholders' Equity:
Common stock; $0.001 par value: 45,000
shares authorized; 20,449 shares issued; 15,622 and 15,548 shares
outstanding as of April 18, 2021 and December 27, 2020
20
20
Preferred stock, $0.001 par value: 3,000
shares authorized; no shares issued and outstanding as of April 18,
2021 and December 27, 2020
—
—
Treasury stock, 4,827 and 4,901 shares, at
cost as of April 18, 2021 and December 27, 2020
(196,883)
(199,908)
Paid-in capital
240,647
243,407
Accumulated other comprehensive loss, net
of tax
17
(4)
Retained earnings
68,485
77,198
Total stockholders' equity
112,286
120,713
Total liabilities and stockholders'
equity
$
951,137
$
974,739
Schedule I
Reconciliation of Non-GAAP Results to GAAP
Results (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 non-GAAP measurements which
present the sixteen weeks ended April 18, 2021, April 19, 2020 and
April 21, 2019(1) Net (loss) income and basic and diluted loss per
share, excluding the effects of goodwill impairment, restaurant
asset impairment, litigation contingencies, board and stockholder
matters costs, restaurant closure and refranchising costs,
severance costs, COVID-19 related costs, and related income tax
effects. The Company believes the presentation of net loss and loss
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 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.
Sixteen Weeks Ended
April 18, 2021
April 19, 2020
April 21. 2019(1)
Net (loss) income as reported
$
(8,713)
$
(174,298)
$
639
Restaurant closure and refranchising
costs
2,447
1,406
304
Restaurant asset impairment
1,242
15,498
—
Litigation contingencies
1,085
4,500
—
COVID-19 related costs
569
198
—
Board and stockholder matter costs
128
1,482
—
Severance costs
—
881
1,994
Goodwill impairment
—
95,414
—
Executive retention
—
—
100
Income tax effect
(1,422)
(31,039)
(623)
Adjusted net (loss) income
$
(4,664)
$
(85,958)
$
2,414
(Loss) earnings per share - basic:
Net loss as reported
$
(0.56)
$
(13.51)
$
0.05
Restaurant closure and refranchising
costs
0.16
0.11
0.03
Restaurant asset impairment
0.08
1.20
—
Litigation contingencies
0.07
0.35
—
COVID-19 related costs
0.03
0.02
—
Board and stockholder matter costs
0.01
0.11
—
Severance and executive transition
—
0.07
0.15
Goodwill impairment
—
7.40
—
Executive retention
—
—
0.01
Income tax effect
(0.09)
(2.41)
(0.05)
Adjusted (loss) earnings per share -
basic
$
(0.30)
$
(6.66)
$
0.19
(Loss) earnings per share - diluted:
Net loss as reported
$
(0.56)
$
(13.51)
$
0.05
Restaurant closure and refranchising
costs
0.16
0.11
0.03
Restaurant asset impairment
0.08
1.20
—
Litigation contingencies
0.07
0.35
—
COVID-19 related costs
0.03
0.02
—
Board and stockholder matter costs
0.01
0.11
—
Severance and executive transition
—
0.07
0.15
Goodwill impairment
—
7.40
—
Executive retention
—
—
0.01
Income tax effect
(0.09)
(2.41)
(0.05)
Adjusted (loss) earnings per share -
diluted
$
(0.30)
$
(6.66)
$
0.19
Weighted average shares outstanding
Basic
15,579
12,903
12,967
Diluted
15,579
12,903
13,041
(1) Presented for improved comparability.
Schedule II
Reconciliation of Non-GAAP Restaurant-Level
Operating Profit to (Loss) Income from Operations and Net (Loss)
Income (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 restaurant
revenue minus restaurant-level operating costs, excluding
restaurant impairment and closure costs. 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 related to restaurant
equipment, 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
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 loss from operations or net
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. The table below sets forth certain unaudited information
for the sixteen weeks ended April 18, 2021, April 19, 2020, and
April 21, 2019(2) expressed as a percentage of total revenues,
except for the components of restaurant-level operating profit that
are expressed as a percentage of restaurant revenue.
Sixteen Weeks Ended
April 18, 2021
April 19, 2020
April 21. 2019(2)
Restaurant revenues
$
318,677
97.7%
$
301,434
98.5%
$
400,484
97.7%
Restaurant operating costs(1):
Cost of sales
69,166
21.7
70,426
23.4
93,715
23.4
Labor
111,659
35.0
118,566
39.3
142,894
35.7
Other operating
57,712
18.1
52,291
17.3
55,565
13.9
Occupancy
30,100
9.4
33,657
11.2
35,020
8.7
Restaurant-level operating profit
50,040
15.7%
26,494
8.8%
73,290
18.3
Add – Franchise royalties, fees, and other
revenue
7,598
2.3%
4,631
1.5%
9,382
2.3
Deduct – other operating:
Depreciation and amortization
25,888
7.9
28,320
9.3
28,438
6.9
General and administrative expenses
22,255
6.8
26,723
8.7
30,090
7.3
Selling
8,355
2.6
14,779
4.8
18,026
4.4
Pre-opening & acquisition costs
—
—
153
—
319
0.1
Other charges
5,471
1.7
119,379
39.0
2,398
0.6
Total other operating
61,969
19.0%
189,354
61.9%
79,271
19.3
(Loss) income from operations
(4,331)
(1.3)%
(158,229)
(51.7)%
3,401
0.8
Interest expense, net and other
4,330
1.3
3,370
1.1
3,238
0.8
Income tax provision (benefit)
52
0.0
12,699
4.1
(476)
(0.1)
Total other
4,382
1.3
16,069
5.3
2,762
0.7
Net (loss) income
$
(8,713)
(2.7)%
$
(174,298)
(56.9)%
$639
0.2%
(1)
Excluding depreciation and amortization, which is shown
separately.
(2)
Presented for improved comparability.
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 (Loss) Income to
EBITDA and Adjusted EBITDA (In thousands, unaudited)
The Company defines EBITDA as net (loss) income before interest
expense, income taxes, and depreciation and amortization. EBITDA
and adjusted EBITDA are presented because the Company believes
investors’ understanding of its performance is enhanced by
including these non-GAAP financial measures as a reasonable basis
for evaluating its ongoing results of operations excluding the
effects of goodwill impairment, restaurant asset impairment,
litigation contingencies, board and stockholder matters costs,
restaurant closure and refranchising costs, severance costs, and
COVID-19 related costs. EBITDA and adjusted EBITDA are supplemental
measures of operating performance that do not represent and should
not be considered as alternatives to net (loss) income or cash flow
from operations, as determined by GAAP, and the Company's
calculation thereof may not be comparable to that reported by other
companies in its 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 the Company's performance based on its 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 the
Company's presentation of adjusted EBITDA should not be construed
as an inference that its future results will be unaffected by
excluded or unusual items. The Company has not provided a
reconciliation of its adjusted EBITDA outlook to the most
comparable GAAP measure of Net (loss) income. Providing Net (loss)
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 (loss) income,
including asset impairments and income tax valuation adjustments.
The reconciliations of adjusted EBITDA to Net (loss) 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.
Sixteen Weeks Ended
April 18, 2021
April 19, 2020
4/21/2019(1)
Net (loss) income as reported
$
(8,713)
$
(174,298)
$
639
Interest expense, net
4,677
3,234
3,345
Income tax provision (benefit)
52
12,699
(476)
Depreciation and amortization
25,888
28,320
28,438
EBITDA
$
21,904
$
(130,045)
$
31,946
Restaurant closure and refranchising
costs
$
2,447
$
1,406
$
304
Restaurant asset impairment
1,242
15,498
—
Litigation contingencies
1,085
4,500
—
COVID-19 related costs
569
198
—
Board and stockholder matter costs
128
1,482
—
Severance costs
—
881
1,994
Goodwill impairment
—
95,414
—
Executive retention
—
—
100
Adjusted EBITDA
$
27,375
$
(10,666)
$
34,344
(1) Presented for improved comparability.
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version on businesswire.com: https://www.businesswire.com/news/home/20210525005904/en/
For media relations questions contact: Danielle
Paleafico, Coyne PR (973) 588-2000 For investor relations
questions contact: Raphael Gross, ICR (203) 682-8253
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