Red Robin Gourmet Burgers, Inc., (NASDAQ: RRGB), a casual dining
restaurant chain focused on serving an innovative selection of
high-quality gourmet burgers in a family-friendly atmosphere, today
reported financial results for the 12 and 52 weeks ended December
26, 2010.
Financial and Operational Results
Results for the 12 weeks ended December 26, 2010, compared to
the 12 weeks ended December 27, 2009, are as follows:
- Restaurant revenue increased 5.4% to
$189.3 million.
- Company-owned comparable restaurant
sales increased 0.8%.
- Restaurant-level operating profit
increased 3.2% to $32.2 million.
- GAAP diluted earnings per share were
$0.14 vs. $0.10 in the same period a year ago, including the
effects of costs related to closing two company-owned restaurants
and executive transition expense in 2010.
- Non-GAAP adjusted net income was $1.9
million, or earnings of $0.12 per diluted share, excluding the
restaurant closing and executive transition costs. (See Schedule II
at the end of this release for a reconciliation of these non-GAAP
calculations to GAAP.)
- Four new company-owned Red Robin®
restaurants and two new franchised restaurants opened during the
fourth quarter 2010.
Results for the 52 weeks ended December 26, 2010, compared to
the 52 weeks ended December 27, 2009, are as follows:
- Restaurant revenue increased 2.2% to
$846.4 million.
- Company-owned comparable restaurant
sales decreased 0.6%.
- Restaurant-level operating profit
decreased 3.6% to $150.7 million.
- Selling, general and administrative
(SG&A) expense increased to $88.8 million in 2010 from $76.3
million in 2009. Included in the 2010 SG&A expense is an
increase in television advertising expense of $12.9 million, CEO
transition expense of $2.6 million and restaurant closure costs of
$0.8 million.
- GAAP diluted earnings per share were
$0.46, including the effects of restaurant impairment and closure
charges and executive transition expenses, vs. GAAP diluted
earnings per share in fiscal 2009 of $1.14.
- Non-GAAP adjusted net income was $13.4
million, or earnings of $0.85 per diluted share, excluding the
effects of restaurant impairment and closure charges and executive
transition expenses. (See Schedule II at the end of this release
for a reconciliation of these non-GAAP calculations to GAAP.)
- A total of 15 new Red Robin®
restaurants, 11 company-owned and four franchised locations were
opened during the full fiscal year 2010.
As of the end of the fiscal year 2010, there were 314
company-owned and 136 franchised Red Robin® restaurants.
“In a matter of a few short months, we have galvanized and
focused the entire Red Robin Team to drive performance improvement
and re-establish our company as a best-in-class restaurant
operator,” said Steven Carley, Red Robin Gourmet Burgers, Inc.’s
chief executive officer. “We are implementing significant
initiatives, which we call Project RED, to increase same store
sales, reduce expenses, improve restaurant level margins and drive
overall corporate profitability. We are also allocating capital
prudently to maximize long-term shareholder returns.”
Fiscal Fourth Quarter 2010 Results
Comparable restaurant sales increased 0.8% for company-owned
restaurants in the fiscal fourth quarter of 2010 compared to the
fiscal fourth quarter of 2009, driven by a 1.1% increase in guest
counts, partially offset by a 0.3% decrease in the average guest
check. Average weekly comparable sales from the 303 company-owned
comparable restaurants were $50,565 in the fiscal fourth quarter of
2010, compared to $50,249 for the 277 company-owned comparable
restaurants in the fiscal fourth quarter of 2009. Average weekly
sales for the 13 non-comparable company-owned restaurants were
$65,610 in the fiscal fourth quarter of 2010, compared to $49,167
for the 29 non-comparable restaurants in the fiscal fourth quarter
a year ago. For all company-owned restaurants, average weekly sales
were $51,103 from 3,771 operating weeks in the fiscal fourth
quarter of 2010 compared to $50,148 from 3,666 operating weeks, in
the fiscal fourth quarter of 2009.
Total Company revenues, which include company-owned restaurant
sales and franchise royalties and fees, increased 5.7% to $192.6
million in the fiscal fourth quarter of 2010, versus $182.2 million
last year. Franchise royalties and fees increased 21.8% to $3.1
million in the fiscal fourth quarter of 2010 compared to $2.6
million for the same period in 2009.
For the fiscal fourth quarter of 2010, the Company’s U.S.
franchise restaurant sales of $65.3 million were higher compared to
$61.9 million in the prior year period. Comparable sales in the
fiscal fourth quarter of 2010 for franchise restaurants in the U.S.
increased 3.4% and for franchise restaurants in Canada increased
0.9% from the fiscal fourth quarter of 2009. Average weekly
comparable sales for the U.S. franchised restaurants were $47,702
from the 106 comparable restaurants in the fiscal fourth quarter of
2010, compared to $45,798 for the 104 comparable restaurants in the
fiscal fourth quarter of 2009. Average weekly sales in the fiscal
fourth quarter of 2010 for the Company’s 18 comparable franchise
restaurants in Canada were C$51,000 versus C$49,297 in the same
period last year. Canadian results are in Canadian dollars.
Restaurant-level operating profit margins at company-owned
restaurants were 17.0% in the fiscal fourth quarter of 2010
compared to 17.3% in the fiscal fourth quarter of 2009. As a
percentage of restaurant revenue, fiscal fourth quarter 2010
restaurant-level operating profit margins were negatively impacted
by a 0.6% increase in food and beverage costs and a 0.2% increase
in labor costs, partially offset by a 0.3% decrease in occupancy
costs and 0.2% decrease in other operating costs.
Schedule I of this earnings release defines restaurant-level
operating profit and reconciles this metric to income from
operations and net income for all periods presented. The Company’s
restaurant-level operating profit metric is designed to afford
management and investors with a basis for considering and comparing
restaurant performance. It is not calculated in conformity with
generally accepted accounting principles (“GAAP”). It is intended
to supplement, rather than replace GAAP results. Restaurant-level
operating profit is useful to management and to the Company’s
investors because it is widely regarded in the restaurant industry
as a meaningful metric by which to evaluate restaurant-level
operating efficiency and performance.
Selling, general and administrative expenses were $19.2 million
in the fiscal fourth quarter of 2010 and $17.1 million in the
fiscal fourth quarter of 2009, which were 9.9% and 9.4% of total
revenue, respectively. Included in the fiscal fourth quarter of
2010 was a $2.1 million investment in the Company’s television
media campaign, compared to $833,000 in the fiscal fourth quarter
of 2009. Also included in fiscal fourth quarter 2010 SG&A
expense was approximately $47,000 in executive transition costs, as
well as $767,000 in costs related to closing two company-owned
restaurants.
Interest expense was $0.8 million in the fiscal fourth quarter
of 2010, compared to $1.8 million in the fiscal fourth quarter of
2009.
Net income for the fiscal fourth quarter of 2010 was $2.2
million or $0.14 per diluted share, compared to net income of $1.6
million, or $0.10 per diluted share, in the fiscal fourth quarter
of 2009. Included in fiscal fourth quarter 2010 results were costs
related to executive transition and the closing of two
company-owned restaurants. Excluding the executive transition
expense and restaurant closing costs, and using a normalized annual
tax provision of 6.2%, the Company’s fiscal fourth quarter 2010
earnings would have been $0.12 per diluted share. Schedule II of
this earnings release reconciles the impact on the net income and
earnings per share as reported on a GAAP basis to adjusted amounts
excluding certain charges in the fiscal fourth quarter and full
year of 2010 and 2009.
The Company had an effective tax benefit of $1.1 million in the
fiscal fourth quarter of 2010, compared to a $422,000 tax benefit
in the fourth quarter 2009. Our full-year 2010 tax is a benefit of
$2.6 million, which equates to a full-year tax rate benefit of
54.3%, since general business tax credits, primarily the FICA tip
tax credit, significantly exceeded the combined Federal and state
statutory provision on a lower income before taxes for 2010.
Balance Sheet and Liquidity
On December 26, 2010, the Company held $17.9 million in cash and
cash equivalents and had a total outstanding debt balance of $158.5
million, including $104.0 million of borrowings under its $150
million term loan, $43.0 million of borrowings under its $150
million revolving credit facility and $11.6 million outstanding for
capital leases. The Company has also issued $6.6 million of
outstanding letters of credit under its revolving credit facility.
In the fiscal fourth quarter of 2010, the Company paid down $2.2
million in debt.
The Company is subject to a number of customary covenants under
its credit agreement, including limitations on new credit
facilities, acquisitions, dividend payments, and requirements to
maintain certain financial ratios. As of December 26, 2010, the
Company was in compliance with all of its debt covenants, and the
Company expects to remain in full compliance with its current
credit agreement during the 2011 fiscal year.
Outlook
In 2011, the Company’s strategic focus will be around efforts to
support the “Project RED” initiatives. These initiatives support
revenue growth, expense management and deployment of capital.
Revenue driving initiatives include the implementation of a guest
loyalty program called “Red Royalty,” a focus on targeting adult
guests and improving alcohol beverage sales, and using a Limited
Time Offer strategy supported with television advertising. In
addition, the Company plans to take a price increase of 1.5% in
April of this year to help mitigate commodity cost increases it
expects to incur in 2011. With regard to expense management, the
initiatives will be focused on reducing SG&A expense and
restaurant costs. The SG&A expense reductions were supported by
actions taken early in the year to reduce administrative headcount,
which resulted in $3 million in annualized savings. The Company is
also in the process of identifying $16 million to $18 million in
annualized savings from a reduction in restaurant costs, which it
expects to be realized over the next 12 to 24 months. Deployment of
capital will focus on the Company’s investment in new restaurant
development, the investment in an overhaul of its data
infrastructure, the repurchase opportunity related the Company’s
stock, as well as future refinancing activities. The Company
representatives will be discussing these initiatives in further
detail on their earnings conference call scheduled for later today.
See below in the “Investor Conference Call and Webcast” section of
this release for information on how to access the call and
webcast.
The Company’s fiscal first quarter of 2011 is a 16-week quarter.
Seven new company-owned restaurants are currently under
construction. One new company-owned restaurant opened in the fiscal
first quarter. Two new franchised restaurants are currently under
construction, with one of these franchised restaurants expected to
open later in the first quarter of 2011 and the other in the second
quarter of 2011. During fiscal year 2011, the Company expects to
open 10 new company-owned restaurants, one of which opened early in
the first quarter of 2011, and franchisees are expected to open
three to four new restaurants.
Through February 14, 2011, company-owned comparable restaurant
sales decreased 0.4%, compared to a year-over-year company-owned
comparable restaurant sales decrease of 7.8% for the same period of
2010. Removing the impact of weather so far in 2011 and the timing
of Valentine’s Day, the comparable restaurant sales would have been
an increase of 0.4%.
Next week the Company will begin TV advertising support for its
spring limited time offer (LTO) promotion. The cost of the TV
advertising support is expected to be approximately $4.4 million in
the first fiscal quarter of 2011. The Company also expects to spend
another $9 million on TV advertising during the balance of the year
to support LTO promotions in the summer and fall of 2011.
Television advertising spending during the full fiscal year 2010
was $15.4 million. The Company’s total marketing expense in 2011 is
expected to be about $27.5 million compared to $28.8 million spent
in fiscal 2010, which is included in selling, general and
administrative expense in both years.
Based on the Company’s development plans and other
infrastructure and maintenance costs, the Company expects total
fiscal year 2011 capital expenditures to be between $39 million and
$41 million, which the Company expects to continue funding entirely
out of operating cash flow. The Company also intends to make
scheduled quarterly payments of $4.7 million required by the term
loan portion of its existing credit facility from free cash flow
after capital expenditures and expects to use its remaining free
cash flow to make payments on the Company’s revolving credit
facility and maintain flexibility to opportunistically repurchase
shares of the Company’s common stock. The Company expects to
refinance its current debt in the first half of 2011. The terms of
this refinancing may affect the debt reduction discussed above. In
addition, the Company’s Board had previously authorized up to $50
million for the opportunistic repurchases of the Company’s stock,
of which the Company intends to spend up to $25 million from
operating cash flow and available credit in the next six months
commencing immediately, subject to appropriate valuation of the
Company’s shares and other standard considerations.
Investor Conference Call and
Webcast
Red Robin will host an investor conference call to discuss its
fiscal fourth quarter and year-end 2010 results today at 5:00 p.m.
ET. The conference call number is (888) 264-8954, or for
international callers (913) 312-1468. To access the webcast, please
visit www.redrobin.com and select the “Investors” link from the
menu. The financial information that the Company intends to discuss
during the conference call is included in this press release and
will be available on the “Investors” link of the Company's website
at www.redrobin.com following the conference call.
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., serves up
wholesome, fun, feel-good experiences in a family-friendly
environment. Red Robin® restaurants are famous for serving more
than two dozen insanely delicious, high-quality gourmet burgers in
a variety of recipes with Bottomless Steak Fries®, as well as
salads, soups, appetizers, entrees, desserts, and signature Mad
Mixology® Beverages. There are more than 450 Red Robin® restaurants
located across the United States and Canada, including
company-owned locations and those operating under franchise
agreements.
Forward-Looking Statements:
Certain information and statements contained in this press
release, including those statements regarding the Company’s Project
RED initiatives, expected compliance with the Company’s credit
agreement, as well as certain statements under the heading
“Outlook,” including those regarding the Company’s anticipated new
restaurant openings, loyalty program, TV advertising support,
marketing expense, capital expenditures, pricing and cost
mitigation strategies, stock repurchase program and debt
refinancing, are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements regarding our
expectations, beliefs, intentions, plans, objectives, goals,
strategies, future events or performance and underlying assumptions
and other statements which are other than statements of historical
facts. These statements may be identified, without limitation, by
the use of forward-looking terminology such as “anticipates,”
“assumptions,” “believe,” “continue,” “expects,” intends,” “plans”,
“will” or comparable terms or the negative thereof. All
forward-looking statements included in this press release are based
on information available to the Company on the date hereof. Such
statements speak only as of the date hereof and we undertake no
obligation to update any such statement to reflect events or
circumstances arising after the date hereof. These statements are
based on assumptions believed by us to be reasonable, and involve
known and unknown risks and uncertainties that could cause actual
results to differ materially from those described in the
statements. These risks and uncertainties include, but are not
limited to, the following: the ability to effectively
implement strategies and achieve anticipated revenue and cost
savings from the new Project RED, data infrastructure overhaul and
other initiatives; the downturn in general economic conditions
including severe volatility in financial markets, high levels of
unemployment and decreasing consumer confidence, resulting in
changes in consumer preferences, consumer discretionary spending or
consumer acceptance of pricing changes and increases; the
effectiveness of our marketing and advertising strategies,
including our loyalty program; potential fluctuation in our
quarterly operating results due to economic conditions, seasonality
and other factors; changes in availability of capital or credit
facility borrowings to us and to our franchisees; our ability to
refinance our debt, if at all or on terms favorable to the Company;
the adequacy of cash flows generated by our business or available
debt resources to fund operations and growth opportunities and
repurchases of our common stock; further limitations on our ability
to execute stock repurchases due to lack of available shares or
acceptable stock price levels or other market or company-specific
conditions; the effect of increased competition in the casual
dining market and discounting by competitors; our ability to
achieve and manage our planned expansion, including both in new
markets and existing markets; changes in the cost and availability
of building materials and restaurant supplies; the concentration of
our restaurants in the Western United States and the associated
disproportionate impact of macroeconomic factors; changes in
the availability and costs of food; changes in labor and energy
costs and changes in the ability of our vendors to meet our supply
requirements; labor shortages, particularly in new markets; the
effectiveness of our initiative to normalize new restaurant
operations; lack of awareness of our brand in new markets;
concentration of less mature restaurants in the comparable
restaurant base which impacts profitability; the ability of our
franchisees to open and manage new restaurants; health concerns
about our food products and food preparation; our ability to
protect our intellectual property and proprietary information; the
impact of federal, state or local government regulations relating
to our team members or the sale of food or alcoholic beverages; our
franchisees’ adherence to our practices, policies and procedures;
and other risk factors described from time to time in the Company’s
10-Q and 10-K filings with the SEC.
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
amounts)
(Unaudited)
December 26,2010
December 27,2009
Assets: Current Assets: Cash and cash equivalents $ 17,889 $
20,268 Restricted cash—marketing funds 91 189 Accounts receivable,
net 6,983 5,179 Inventories 16,037 14,526 Prepaid expenses and
other current assets 7,509 6,203 Income tax receivable 3,822 4,713
Deferred tax asset 1,294 4,127 Total
current assets 53,625 55,205 Property
and equipment, net 414,048 431,536 Goodwill 61,769 61,769
Intangible assets, net 43,056 47,426 Other assets, net 6,759
4,159 Total assets $ 579,257 $ 600,095
Liabilities and Stockholders’ Equity: Current
Liabilities: Trade accounts payable $ 12,776 $ 10,891 Construction
related payables 2,943 3,181 Accrued payroll and payroll related
liabilities 29,137 26,912 Unearned revenue, net 14,391 15,437
Accrued liabilities 18,592 19,483 Current portion of term loan
notes payable 18,739 18,739 Current portion of long-term debt and
capital lease obligations 838 779 Total
current liabilities 97,416 95,422
Deferred rent 34,214 30,996 Long-term portion of term loan notes
payable 85,214 103,954 Other long-term debt and capital lease
obligations 53,731 67,862 Other non-current liabilities
8,021 13,239 Total liabilities 278,596
311,473 Stockholders’ Equity: Common
stock; $0.001 par value: 30,000,000 shares authorized; 17,101,897
and 17,079,267 shares issued; 15,599,259 and 15,586,948 shares
outstanding 17 17 Preferred stock, $0.001 par value: 3,000,000
shares authorized; no shares issued and outstanding - - Treasury
stock 1,501,030 and 1,492,280 shares, at cost (50,321 ) (50,125 )
Paid-in capital 171,558 167,637 Accumulated other comprehensive
loss, net of tax (197 ) (1,212 ) Retained earnings 179,604
172,305 Total stockholders’ equity
300,661 288,622 Total liabilities and
stockholders’ equity $ 579,257 $ 600,095
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per share
data)
(Unaudited)
Twelve Weeks Ended Fifty-Two Weeks Ended
December 26,2010
December 27,2009
December 26,2010
December 27,2009
Revenues: Restaurant revenue $ 189,295 $ 179,595 $ 846,389 $
828,031 Franchise royalties and fees 3,117 2,560 13,409 12,825
Other revenue 162 42 4,471
189 Total revenues 192,574
182,197 864,269 841,045
Costs and expenses: Restaurant operating costs: Cost of sales
46,206 42,723 206,639 199,195 Labor 67,798 63,918 300,878 287,981
Operating 28,442 27,214 125,137 122,183 Occupancy 14,694 14,584
63,055 62,420 Depreciation and amortization 12,959 13,351 56,738
57,166 Selling, general and administrative expenses 19,153 17,066
88,836 76,260 Franchise development 352 310 4,122 4,203 Pre-opening
costs 1,024 433 3,015 3,696 Asset impairment charge -
- 6,116 - Total costs and
expenses 190,628 179,599 854,536
813,104 Income from operations 1,946 2,598
9,733 27,941 Other (income) expense: Interest expense 828 1,811
5,112 6,903 Interest income (20 ) (13 ) (63 ) (111 ) Other
(33 ) (409 ) (46 ) (380 ) Total other expenses
775 1,389 5,003 6,412 Income before income taxes 1,171 1,209 4,730
21,529 Provision (benefit) for income taxes (1,057 )
(422 ) (2,569 ) 3,930 Net income $ 2,228
$ 1,631 $ 7,299 $ 17,599 Earnings per
share: Basic $ 0.14 $ 0.11 $ 0.47 $ 1.14
Diluted $ 0.14 $ 0.10 $ 0.46 $ 1.14
Weighted average shares outstanding: Basic 15,563
15,436 15,536 15,392
Diluted 15,703 15,555
15,709 15,504
Schedule I
Reconciliation of Non-GAAP Restaurant-Level
Operating Profit to Incomefrom Operations and Net
Income(In thousands, except percentage data)
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 revenues minus restaurant-level operating costs,
excluding restaurant closures and impairment 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 a
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, pre-opening costs, reacquired franchise costs, legal
settlements and costs associated with the tender offer of stock
options attributed to non-restaurant employees. 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 generally accepted
accounting principles (“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. The table below sets
forth certain unaudited information for the 12 and 52 weeks ended
December 26, 2010, and December 27, 2009, expressed as a percentage
of total revenues, except for the components of restaurant
operating costs, which are expressed as a percentage of restaurant
revenues.
Twelve Weeks Ended
December 26, 2010
December 27, 2009 As Reported As
Reported Restaurant revenues
$
189,295
98.3
%
$
179,595
98.6 % Restaurant operating costs: Cost of sales 46,206 24.4 42,723
23.8 Labor 67,798 35.8 63,918 35.6 Operating 28,442 15.0 27,214
15.2 Occupancy 14,694 7.8 14,584
8.1 Restaurant-level operating profit 32,155
17.0 31,156 17.3 Add – other
revenues 3,279 1.7 2,602 1.4 Deduct – other operating: Depreciation
and amortization 12,959 6.7 13,351 7.3 Selling, general and
administrative 18,738 9.7 17,412 9.6 Pre-opening costs 1,024 0.5
433 0.2 Restaurant closure costs 767 0.4
(36 ) - Total other operating 33,488
17.4 31,160 17.1 Income from
operations 1,946 1.0 2,598 1.4 Total other expenses, net 775
0.4 1,389 0.8 Benefit for income taxes (1,057 ) (0.5 )
(422 ) (0.2 ) Total other (282 ) (0.1 ) 967 0.5 Net
income $ 2,228 1.2 % $ 1,631 0.9 %
Certain percentage amounts in the table above do not total due
to rounding as well as the fact that restaurant operating costs are
expressed as a percentage of restaurant revenues, as opposed to
total revenues.
Fifty-two Weeks Ended
December 26, 2010
December 27, 2009
As Reported As Reported
Restaurant revenues
$
846,389
97.9 %
$
828,031
98.5
%
Restaurant operating costs: Cost of sales 206,639 24.4 199,195 24.1
Labor 300,878 35.5 287,095 34.7 Operating 125,137 14.8 122,183 14.8
Occupancy 63,055 7.4 62,420 7.5 Tender offer stock-based
compensation expense - 886 0.1
Restaurant-level operating profit 150,680 17.8
156,252 18.9 Add – other revenues 17,880 2.1
13,014 1.5 Deduct – other operating: Depreciation and amortization
56,738 6.6 57,166 6.8 Selling, general and administrative 92,102
10.7 76,785 9.1 Pre-opening costs 3,015 0.3 3,696 0.4 Tender offer
stock-based
compensation expense
- - 3,116 0.4 Asset impairment charge 6,116 - - - Restaurant
closure costs 856 0.1 562 0.1
Total other operating 158,827 17.7
141,325 16.8 Income from operations 9,733 1.1 27,941
3.3 Total other expenses, net 5,003 0.6 6,412 0.8 Provision
(benefit) for income taxes (2,569 ) (0.3 ) 3,930 0.5
Total other 2,434 0.3 10,342 1.2 Net income $ 7,299
0.8 % $ 17,599 2.1 %
Certain percentage amounts in the table above do not total due
to rounding as well as the fact that restaurant operating costs are
expressed as a percentage of restaurant revenues, as opposed to
total revenues.
Schedule II
Reconciliation of Non-GAAP Results to GAAP
Results
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 twelve and fifty-two weeks ended December 26, 2010, and
December 27, 2009, net income and diluted net income per share,
excluding the effects of the executive transition costs, restaurant
closures and impairment of four restaurants and the 2009 cash
tender offer. The Company believes that the presentation of net
income and earnings per share exclusive of the identified charges
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. The non-GAAP results
were calculated using an assumed 6.2% normalized tax rate in 2010
on income before taxes excluding the identified charges. The
non-GAAP measurements are intended to supplement the presentation
of the Company’s financial results in accordance with GAAP.
Twelve Weeks Ended
Fifty-Two Weeks Ended December 26, 2010 December
27, 2009 December 26, 2010 December 27, 2009
Net income as reported $ 2,228 $ 1,631 $ 7,299 $ 17,599
Asset impairment - - 6,116 - Restaurant closure costs 767 (36 ) 856
562 Executive transition costs 47 - 2,559 - 2009 cash tender offer
- - - 4,002 Income tax expense (1,180 ) (13 )
(3,457 ) (834 ) Non-GAAP adjusted net income $ 1,862
$ 1,582 $ 13,373 $ 21,329 Basic net income per share:
Net income $ 0.14 $ 0.11 $ 0.47 $ 1.14 Asset impairment - - 0.39 -
Restaurant closure costs 0.05 - 0.06 0.04 Executive transition
costs - - 0.16 - 2009 cash tender offer - - - 0.26 Income tax
expense (0.07 ) - (0.22 ) (0.05
) Basic Non-GAAP adjusted net income $ 0.12 $ 0.11 $ 0.86 $
1.39 Diluted net income per share: Net income
$ 0.14 $ 0.10 $ 0.46 $ 1.14 Asset impairment - - 0.39 - Restaurant
closure costs 0.05 - 0.05 0.04 Executive transition costs - - 0.16
- 2009 cash tender offer - - - 0.26 Income tax expense (0.07
) - (0.21 ) (0.06 ) Diluted
Non-GAAP adjusted net income $ 0.12 $ 0.10 $ 0.85 $ 1.38
Weighted average shares outstanding: Basic 15,563 15,436 15,536
15,392 Diluted 15,703 15,555 15,709 15,504
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