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 October 1, 2017.
Third Quarter 2017 Financial Highlights Compared to Third
Quarter 2016
- Total revenues were $304.2 million, an
increase of 2.3%;
- Net income was $2.7 million compared to
net loss of $1.3 million;
- Comparable restaurant revenue decreased
0.1% (using constant currency rates);
- Off-premise increased to 7.6% of total
food and beverage sales compared to 5.4%;
- Adjusted EBITDA was $25.5 million
compared to $26.8 million (see Schedule III);
- GAAP earnings per diluted share were
$0.21 compared to GAAP diluted loss per share of $0.10; and
- Adjusted earnings per diluted share
were $0.21 compared to $0.38 (see Schedule I).
“Despite topline results that fell short of our expectations,
Red Robin significantly outperformed the casual dining industry on
traffic for a fifth consecutive quarter. Our focus on compelling
Every Day Value and the progress we have made in growing our
off-premise business continued to pull us away from the category
and we are now competing favorably with best-in-class casual dining
chains,” said Denny Marie Post, Red Robin Gourmet Burgers, Inc.
chief executive officer. “Although we grew our share while
beginning to implement service model changes that address rising
labor costs, category volatility underscores our cautious outlook
for the remainder of 2017 and our intention to pause unit growth as
of year-end 2018. This decision will give us needed time to test
new approaches to inform future growth.”
Operating Results
Total revenues, which primarily include Company-owned restaurant
revenue and franchise royalties, increased 2.3% to $304.2 million
in the third quarter of 2017 from $297.3 million in the third
quarter of 2016. Restaurant revenue increased $7.2 million,
primarily due to a $9.7 million increase in revenue from new
restaurant openings and a $0.4 million favorable foreign currency
impact, partially offset by $2.7 million from closed restaurants
and a $0.2 million, or 0.1%, decrease in comparable restaurant
revenue.
System-wide restaurant revenue (which includes franchised units)
for the third quarter of 2017 totaled $361.0 million, compared to
$355.5 million for the third quarter of 2016.
Comparable restaurant revenue(1) decreased 0.1% in the third
quarter of 2017 compared to the same period a year ago, driven by a
0.1% decrease in average guest check and flat guest counts. The
decrease in average guest check comprised a 1.6% decrease in menu
mix, partially offset by a 1.5% increase in pricing.
Restaurant-level operating profit margin (a non-GAAP financial
measure) was 17.4% in the third quarter of 2017 compared to 18.6%
in the same period a year ago. The 120 basis point margin decrease
in the third quarter of 2017 resulted from a 50 basis point
increase in labor costs, a 40 basis point increase in other
restaurant operating expenses, a 20 basis point increase in cost of
sales, and a 10 basis point increase 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
Q3 2017 Q3 2016 Average
weekly sales per unit(1): Company-owned – Total $ 52,955 $ 52,439
Company-owned – Comparable $ 53,233 $ 53,022 Franchised units –
Comparable $ 57,980 $ 59,767 Total operating weeks: Company-owned
units 5,686 5,613 Franchised units 1,032 1,032
________________________________________
(1) Calculated using constant currency rates. Using
historical currency rates, the average weekly sales per unit in the
third quarter of 2016 for Company-owned – Total and Company-owned –
Comparable was $52,362 and $52,940. 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 decreased to $21.3 million
in the third quarter of 2017 from $21.5 million in the third
quarter of 2016. The decrease was primarily related to depreciation
of certain corporate assets in the third quarter of 2016 prior to
the Company’s migration to a cloud-based Enterprise Resource
Planning system.
General and administrative costs were $18.6 million, or 6.1% of
total revenues, in the third quarter of 2017, compared to $20.3
million, or 6.8% of total revenues in the same period a year
ago.
Selling expenses were $10.3 million, or 3.4% of total revenues,
in the third quarter of 2017, compared to $8.7 million, or 2.9%, of
total revenues during the same period in the prior year.
Pre-opening and acquisition costs were $1.5 million in the third
quarter of 2017, compared to $2.4 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 34.1% in the third quarter
of 2017, compared to a tax benefit of 77.8% for the third quarter
of 2016. The change in the effective tax rate is primarily due to
the asset impairment and restaurant closure costs recognized in the
third quarter of 2016, which resulted in a larger quarterly tax
benefit.
Net income for the third quarter ended October 1, 2017 was
$2.7 million compared to net loss of $1.3 million for the same
period a year ago. Earnings per diluted share for the third quarter
of 2017 were $0.21 compared to diluted loss per share of $0.10 in
third quarter 2016.
Earnings per diluted share and adjusted earnings per diluted
share for the third quarter ended October 1, 2017 were $0.21.
Excluding charges of $0.48 per diluted share for restaurant
impairment and closure, adjusted earnings per diluted share for the
third quarter ended October 2, 2016 were $0.38. 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 third quarter of 2017, the Company opened seven Red
Robin restaurants. The Company plans to open two Red Robin
restaurants during the remainder of 2017.
The following table details restaurant unit data for
Company-owned and franchised locations for the periods
indicated:
Twelve Weeks Ended Forty
Weeks Ended October 1, 2017 October 2,
2016 October 1, 2017 October 2, 2016
Company-owned: Beginning of period 472 460 465 439 Opened during
the period 7 11 16 21 Acquired from franchisees — — —
13
Closed during the period — (9 ) (2 ) (11 ) End of period 479
462 479 462 Franchised: Beginning of
period 86 86 86 99 Opened during the period — — 1 — Sold or closed
during the period — — (1 ) (13 ) End of period 86
86 86 86 Total number of restaurants
565 548 565 548
Balance Sheet and Liquidity
As of October 1, 2017, the Company had cash and cash
equivalents of $15.0 million and total debt of $276.8 million,
excluding $11.0 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 $3.4 million on its credit facility during the third quarter of
2017. As of October 1, 2017, the Company had outstanding
borrowings under its credit facility of $275.9 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 was 4.20x as of
October 1, 2017. The lease adjusted leverage ratio is defined
in Section 1.1 of the Company's credit facility, which is filed as
Exhibit 10.32 in the Annual Report on Form 10-K filed on February
21, 2017.
Outlook for 2017
- Earnings per diluted share is projected
to range from $0.45 to $0.60 for the fourth quarter and range from
$2.16 to $2.31 for full-year 2017.
- Comparable restaurant revenue is
projected to range from flat to up 0.5% for full-year 2017.
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 $145,000 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
third quarter 2017 results today at 5:00 p.m. ET. The conference
call number is (877) 723-9521, or for international callers (719)
325-4765. 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 Monday, November 13, 2017.
The replay can be accessed by dialing (844) 512-2921, or (412)
317-6671 for international callers. The conference ID is
3106139.
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, service
model changes, new restaurant openings, 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 Forty Weeks Ended
October 1, 2017
October 2, 2016
October 1, 2017
October 2, 2016
Revenues: Restaurant revenue $ 301,100 $ 293,858 $ 1,026,902 $
992,745 Franchise royalties, fees and other revenue 3,148
3,449 11,674 12,237 Total revenues 304,248
297,307 1,038,576 1,004,982 Costs and
expenses: Restaurant operating costs (exclusive of depreciationand
amortization shown separately below): Cost of sales 71,642 69,447
240,152 232,603 Labor 106,205 102,294 360,146 338,125 Other
operating 44,846 42,463 142,238 132,446 Occupancy 25,868 25,121
84,127 82,524 Depreciation and amortization 21,258 21,468 70,475
64,578 General and administrative 18,562 20,328 71,402 72,280
Selling 10,308 8,718 32,837 31,173 Pre-opening and acquisition
costs 1,503 2,382 4,735 6,992 Other charges(1) — 9,321
1,584 17,906 Total costs and expenses 300,192
301,542 1,007,696 978,627 Income (loss) from
operations 4,056 (4,235 ) 30,880 26,355 Other expense:
Interest expense, net and other 2,032 1,612 7,469
4,736 Income (loss) before income taxes 2,024 (5,847
) 23,411 21,619 Provision (benefit) for income taxes (690 ) (4,547
) 2,199 1,142 Net income (loss) $ 2,714 $ (1,300 ) $
21,212 $ 20,477 Earnings (loss) per share: Basic $ 0.21
$ (0.10 ) $ 1.65 $ 1.52 Diluted $ 0.21 $ (0.10
) $ 1.63 $ 1.50 Weighted average shares outstanding: Basic
12,927 13,214 12,888 13,471 Diluted 13,023 13,214 12,986 13,606
(1) Certain amounts presented in prior periods have been
reclassified to conform with the current period presentation. For
the twelve weeks ended October 2, 2016, the Company reclassified
restaurant impairment charges and closure costs of $9.3 million
from Restaurant impairment and closure to Other charges on the
condensed consolidated statement of operations. For the forty weeks
ended October 2, 2016, the Company reclassified impairment charges
of $14.0 million from Restaurant impairment and closure 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)
October 1, 2017
December 25, 2016 Assets: Current Assets: Cash and
cash equivalents $ 14,984 $ 11,732 Accounts receivable, net 12,253
24,166 Inventories 29,480 29,899 Prepaid expenses and other current
assets 28,384 27,049 Total current assets 85,101
92,846 Property and equipment, net 647,301
656,439 Goodwill 97,064 95,935 Intangible assets, net 39,680 42,270
Other assets, net 29,089 31,055 Total assets $
898,235 $ 918,545
Liabilities and
Stockholders’ Equity: Current Liabilities: Trade accounts
payable $ 21,119 $ 13,740 Construction related payables 11,695
12,862 Accrued payroll and payroll related liabilities 38,967
34,703 Unearned revenue 37,905 50,199 Accrued liabilities and other
41,079 29,505 Total current liabilities 150,765
141,009 Deferred rent 73,780 72,431 Long-term
debt 276,775 336,375 Long-term portion of capital lease obligations
10,286 10,805 Other non-current liabilities 9,864 9,872
Total liabilities 521,470 570,492
Stockholders’ Equity: Common stock; $0.001 par value: 45,000 shares
authorized; 17,851 and 17,851 shares issued; 12,935 and 12,828
shares outstanding 18 18 Preferred stock, $0.001 par value: 3,000
shares authorized; no shares issued and outstanding — — Treasury
stock 4,916 and 5,023 shares, at cost (203,296 ) (207,720 ) Paid-in
capital 209,520 208,022 Accumulated other loss, net of tax (3,430 )
(5,008 ) Retained earnings 373,953 352,741 Total
stockholders’ equity 376,765 348,053 Total
liabilities and stockholders’ equity $ 898,235 $ 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 40 weeks ended October 1, 2017 and October 2,
2016, net income (loss) and basic and diluted earnings (loss) per
share, excluding the effects of litigation contingencies, asset
impairment, and the related income tax effects. The Company
believes the presentation of net income (loss) and earnings (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.
Twelve Weeks Ended Forty
Weeks Ended
October 1, 2017
October 2, 2016
October 1, 2017
October 2, 2016
Net income (loss) as reported $ 2,714 $ (1,300 ) $ 21,212 $ 20,477
Restaurant impairment and closure — 9,321 1,584 14,006 Litigation
contingencies — — — 3,900 Income tax effect of reconciling items —
(2,993 ) (618 ) (5,502 ) Adjusted net income $ 2,714
$ 5,028 $ 22,178 $ 32,881 Basic net
income (loss) per share: Net income (loss) as reported $ 0.21 $
(0.10 ) $ 1.65 $ 1.52 Restaurant impairment and closure — 0.70 0.12
1.04 Litigation contingencies — — — 0.29 Income tax effect of
reconciling items — (0.22 ) (0.05 ) (0.41 ) Adjusted
earnings per share - basic $ 0.21 $ 0.38 $ 1.72
$ 2.44 Diluted net income (loss) per share:
Net income (loss) as reported $ 0.21 $ (0.10 ) $ 1.63 $ 1.50
Restaurant impairment and closure — 0.70 0.12 1.03 Litigation
contingencies — — — 0.29 Income tax effect of reconciling items —
(0.22 ) (0.04 ) (0.40 ) Adjusted earnings per share -
diluted $ 0.21 $ 0.38 $ 1.71 $ 2.42
Weighted average shares outstanding Basic 12,927 13,214
12,888 13,471 Diluted 13,023 13,214 12,986 13,606
Schedule II
Reconciliation of Non-GAAP Restaurant-Level
Operating Profit to Income (Loss) from Operations and Net
Income (Loss) (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 (loss)
from operations or net income (loss) as indicators of financial
performance. Restaurant-level operating profit as presented may not
be comparable to other similarly titled measures of other companies
in our industry. The table below sets forth certain unaudited
information for the 12 and 40 weeks ended October 1, 2017 and
October 2, 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 Forty
Weeks Ended October 1, 2017 October 2,
2016 October 1, 2017 October 2, 2016
Restaurant revenue $ 301,100 99.0 % $ 293,858 98.8 %
$ 1,026,902 98.9 % $ 992,745 98.8 % Restaurant
operating costs (1): Cost of sales 71,642 23.8 % 69,447 23.6 %
240,152 23.4 % 232,603 23.4 % Labor 106,205 35.3 % 102,294 34.8 %
360,146 35.1 % 338,125 34.1 % Other operating 44,846 14.9 % 42,463
14.5 % 142,238 13.9 % 132,446 13.3 % Occupancy 25,868
8.6 % 25,121 8.5 % 84,127 8.2 % 82,524
8.3 % Restaurant-level operating profit 52,539 17.4 %
54,533 18.6 % 200,239 19.5 % 207,047
20.9 % Add – Franchise royalties, fees and other revenue
3,148 1.0 % 3,449 1.2 % 11,674 1.1 % 12,237 1.2 % Deduct – other
operating: Depreciation and amortization 21,258 7.0 % 21,468 7.2 %
70,475 6.8 % 64,578 6.4 % General and administrative expenses
18,562 6.1 % 20,328 6.8 % 71,402 6.9 % 72,280 7.2 % Selling 10,308
3.4 % 8,718 2.9 % 32,837 3.2 % 31,173 3.1 % Pre-opening &
acquisition costs 1,503 0.5 % 2,382 0.8 % 4,735 0.5 % 6,992 0.7 %
Other charges — — % 9,321 3.1 % 1,584
0.2 % 17,906 1.8 % Total other operating 51,631
17.0 % 62,217 20.8 % 181,033
17.6 % 192,929 19.2 % Income (loss) from operations
4,056 1.3 % (4,235 ) (1.4 )% 30,880 3.0 % 26,355 2.6 %
Interest expense, net and other 2,032 0.7 % 1,612 0.6 % 7,469 0.7 %
4,736 0.4 % Income tax expense (benefit) (690 ) (0.2 )%
(4,547 ) (1.6 )% 2,199 0.2 % 1,142 0.2 % Total
other 1,342 0.5 % (2,935 ) (1.0 )% 9,668
0.9 % 5,878 0.6 % Net income (loss) $ 2,714
0.9 % $ (1,300 ) (0.4 )% $ 21,212 2.0 %
$ 20,477 2.0 % (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 (Loss) to
EBITDA and Adjusted EBITDA (In thousands, unaudited)
The Company defines EBITDA as net income (loss) before interest
expense, provision (benefit) 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 Forty
Weeks Ended October 1, 2017 October 2,
2016 October 1, 2017 October 2, 2016 Net
income (loss) as reported $ 2,714 $ (1,300 ) $ 21,212 $ 20,477
Interest expense, net 2,222 1,822 8,097 5,032 Provision (benefit)
for income taxes (690 ) (4,547 ) 2,199 1,142 Depreciation and
amortization 21,258 21,468 70,475 64,578
EBITDA(1) 25,504 17,443 101,983 91,229
Restaurant impairment and closure — 9,321 1,584 14,006 Litigation
contingencies — — — 3,900 Adjusted EBITDA $
25,504 $ 26,764 $ 103,567 $ 109,135 (1)
EBITDA for the twelve and forty weeks ended October 2, 2016 was
previously reported as $17.9 million and $94.8 million. To conform
with current period presentation and to provide an EBITDA measure
comparable to other companies in our industry, $0.5 million and
$3.6 million of stock-based compensation is included in EBITDA for
these prior periods.
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For media relations questions:Coyne PRBrian Farley, (973)
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