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 and year ended December 30,
2018.
Financial Highlights for the 12 Weeks Ended December 30, 2018
Compared to the 13 Weeks Ended December 31, 2017
- GAAP loss per diluted share was $0.82
compared to earnings per diluted share of $0.68;
- Adjusted earnings per diluted share
were $0.43 compared to $0.78 (see Schedule I);
- Total revenues were $306.8 million, a
decrease of 10.8%, including the negative impact of $24.3 million
from having one fewer week in 2018 compared to 2017;
- Off-premise sales increased 23.2%, now
comprising 10.6% of total food and beverage sales, including
catering;
- Comparable restaurant revenue decreased
4.5% (using constant currency rates); and
- Comparable restaurant guest counts
decreased 4.4%.
“2018 was a very challenging sales year and the fourth quarter
continued that trend, buoyed somewhat by better than expected
growth in our new catering business, but dragged down by weakness
at in-line mall locations. That said, we made measurable progress
on the operations fundamentals we identified last August as
critical to gradually regaining our momentum in 2019. We were more
prepared to capture the seasonally higher traffic with improved
staffing, scheduling and execution leading to shorter wait times,
fewer Guests walking away, and improved kitchen time to table by
the end of the quarter,” said Denny Marie Post, Red Robin Gourmet
Burgers, Inc. president and CEO. “Continued focus on these and
other fundamentals is essential to delivering sustainable
performance to return to positive sales and traffic. We are focused
on strengthening operations, upgrading our marketing with new
tactics to stabilize our dine-in business and making the critical
investments in technology and resources that will yield benefits by
mid-year and help us achieve Red Robin’s long-term goal of being
both a destination and a source for Gourmet Burgers.”
Operating Results
Total revenues, which primarily include Company-owned restaurant
revenue and franchise royalties, decreased 10.8% to $306.8 million
in the fourth quarter of 2018 from $343.9 million in the fourth
quarter of 2017. Restaurant revenue decreased $37.3 million due to
a $24.3 million decrease from the additional week in 2017, a $13.8
million, or 4.5%, decrease in comparable restaurant revenue, a $1.6
million decrease from closed restaurants, and a $0.4 million
unfavorable foreign currency exchange impact, offset by a $2.8
million increase in revenue from new restaurant openings.
System-wide restaurant revenue (which includes franchised units)
for the fourth quarter of 2018 totaled $363.1 million, compared to
$404.1 million for the fourth quarter of 2017.
Comparable restaurant revenue(1) decreased 4.5% in the fourth
quarter of 2018 compared to the same period a year ago, driven by
a 4.4% decrease in guest counts and a 0.1% decrease in
average guest check. The decrease in average guest check comprised
a 0.2% decrease in menu mix, offset by a 0.1% increase in pricing.
The Company’s comparable revenue growth is calculated by comparing
the same calendar weeks which, for the fourth quarter of 2017,
excludes the first week of the fourth quarter and includes the
additional week of the fourth quarter.
Net loss was $10.6 million for the fourth quarter of 2018
compared to net income of $8.8 million for the same period a year
ago. Adjusted net income was $5.4 million for the fourth quarter of
2018 compared to $10.2 million for the same period a year ago (see
Schedule I).
Restaurant-level operating profit margin (a non-GAAP financial
measure) was 19.4% in the fourth quarter of 2018 compared to 20.5%
in the same period a year ago. Cost of sales as a percentage of
restaurant revenue decreased 10 basis points due to the decrease in
ground beef costs, partially offset by increases in steak fries
cost and usage and increased dairy costs. Restaurant labor costs as
a percentage of restaurant revenue increased 60 basis points due to
higher average wage rates and sales deleverage, partially offset by
improvements in labor productivity. Other restaurant operating
costs increased 40 basis points primarily due to increases in
third-party delivery fees, utility costs, and restaurant supplies,
partially offset by lower equipment repairs and maintenance costs.
Occupancy costs increased 20 basis points primarily due to sales
deleverage. 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) income
from operations and net (loss) income, in each case under GAAP.
________________________________________
(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
Q4 2018(12 Weeks) Q4
2017(13 Weeks) Average weekly sales per unit(1):
Company-owned – Total $ 51,709 $ 54,165 Company-owned – Comparable
$ 52,075 $ 54,227 Franchised units – Comparable $ 58,142 $ 58,646
Total operating weeks: Company-owned units 5,819 6,235 Franchised
units 1,080 1,118
________________________________________
(1) Calculated using constant currency rates. Using
historical currency rates, the average weekly sales per unit in the
fourth quarter of 2017 for Company-owned – Total and Company-owned
– Comparable was $54,235 and $54,298. The Company calculates
non-GAAP constant currency average weekly sales per unit by
translating prior year local currency average weekly sales per unit
to U.S. dollars based on current quarter average exchange rates.
The Company considers non-GAAP constant currency average weekly
sales per unit to be a useful metric to investors and management as
they facilitate a more useful comparison of current performance to
historical performance.
Other Results
Depreciation and amortization costs increased to $22.0 million
in the fourth quarter of 2018 from $22.1 million in the fourth
quarter of 2017. The increase was primarily related to new
restaurant technology implemented beginning in the fourth quarter
of 2017 and new restaurants opened since the fourth quarter of
2017.
General and administrative costs were $18.3 million, or 6.0% of
total revenues, in the fourth quarter of 2018, compared to $21.9
million, or 6.4% of total revenues in the same period a year ago.
The decrease was primarily due to decreases in salaries and team
member benefits related to the reorganization in the first quarter
2018, as well as lower incentive and equity compensation.
Selling expenses were $17.4 million, or 5.7% of total revenues,
in the fourth quarter of 2018, compared to $16.8 million, or 4.9%
of total revenues, during the same period in the prior year.
Other charges in the fourth quarter of 2018 included $18.5
million in asset impairment, $2.4 million in smallwares disposal,
and $0.8 million in litigation costs.
The tax benefit was $7.3 million in the fourth quarter of 2018,
compared to $3.2 million during the same period in the prior year.
The change was primarily due to the decrease in income, as well as
the decrease in the federal statutory rate from 35% to 21% that
occurred in the first quarter of 2018.
Loss per diluted share for the fourth quarter of 2018 was $0.82
compared to earnings per diluted share of $0.68 in the fourth
quarter of 2017. Excluding charges of $1.07 per diluted share for
asset impairment, $0.14 per diluted share for smallwares disposal,
and $0.04 for litigation costs, adjusted earnings per diluted share
for the fourth quarter ended December 30, 2018 were $0.43.
Excluding charges of $0.32 per diluted share for restaurant
impairment, offset by a benefit of $0.22 per diluted share for the
deferred tax liability remeasurement due to the Tax Cuts and Jobs
Act (Tax Act), adjusted earnings per diluted share for the fourth
quarter ended December 31, 2017 were $0.78. 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.
Financial Highlights for the 52 Weeks Ended December 30, 2018
Compared to the 53 Weeks Ended December 31, 2017
Total revenues for the 52 weeks ended December 30, 2018 were
$1.3 billion, a decrease of 3.5% from the 53 weeks ended December
31, 2017, including the negative impact of $24.3 million from
having one fewer week in 2018 compared to 2017. GAAP loss per
diluted share was $0.49 compared to earnings per diluted share of
$2.31 in the prior year, and adjusted earnings per diluted share
were $1.73 compared to $2.49 in the prior year (see Schedule I).
Off-premise sales increased 31.5% during 2018, now comprising 9.9%
of total food and beverage sales. For the 52 weeks ended December
30, 2018, comparable restaurant revenue decreased 2.6% (using
constant currency rates) compared to 2017. Comparable restaurant
guest counts decreased 1.5%, and restaurant labor costs as a
percentage of revenue decreased 0.1% to 34.7%. During 2018, the
Company reduced outstanding borrowings under its credit facility by
$73.0 million.
Restaurant Development
There were no Red Robin restaurant openings during the fourth
quarter of 2018.
The following table details restaurant unit data for
Company-owned and franchised locations for the periods
indicated:
Twelve WeeksEnded
Thirteen WeeksEnded
Fifty-two WeeksEnded
Fifty-three WeeksEnded
December 30,2018
December 31,2017
December 30,2018
December 31,2017
Company-owned: Beginning of period 485 479 480 465 Opened during
the period — 2 8 18 Acquired from franchisees — — — — Closed during
the period (1 ) (1 ) (4 ) (3 ) End of period 484 480
484 480 Franchised: Beginning of period 89 86 86 86
Opened during the period — — 3 1 Sold or closed during the period —
— — (1 ) End of period 89 86 89
86 Total number of restaurants 573 566
573 566
Balance Sheet and Liquidity
As of December 30, 2018, the Company had cash and cash
equivalents of $18.6 million and total debt of $193.4 million,
excluding $10.2 million of capital lease liabilities. The Company
funded capital expenditures with cash flow from operations and made
net repayments of $27.5 million on its credit facility during the
fourth quarter of 2018. As of December 30, 2018, the Company
had outstanding borrowings under its credit facility of $192.5
million, in addition to amounts issued under letters of credit
of $7.8 million, which reduce the amount available under its
credit facility but are not recorded as debt.
The Company’s lease adjusted leverage ratio was 4.08x as of
December 30, 2018. The lease adjusted leverage ratio is
defined in Section 1.1 of the Company’s credit facility, which is
filed as Exhibit 10.32 to the Annual Report on Form 10-K filed on
February 21, 2017.
Outlook for 2019
The Company currently expects the following in 2019:
- Comparable restaurant revenue growth of
0.0% to 1.5%;
- Selling, general and administrative
costs of $160 million to $164 million;
- Net income of $17 million to $22
million;
- EBITDA of $121 million to $126
million;
- Diluted earnings per share of $1.30 to
$1.70;
- Closing approximately five
Company-owned restaurants and no new Company-owned restaurant
openings; and
- Capital expenditures of $50 million to
$60 million including corporate office, systems, maintenance and
restaurant refresh capital, and technology, equipment and other
investments to support growth initiatives.
Guidance Policy
The Company provides guidance as it relates to selected
information related to the Company’s financial and operating
performance, and such measures may differ from year to year.
Investor Conference Call and Webcast
Red Robin will host an investor conference call to discuss its
fourth quarter 2018 results today at 5:00 p.m. ET. The conference
call number is (800) 458-4148, or for international callers (323)
794-2597. 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 “Calendar of Events” link. Prior to the
conference call, the Company will post supplemental financial
information that will be discussed during the call and live
webcast.
To access the supplemental financial information and webcast,
please visit www.redrobin.com and select the “Company” section,
then the “Investor Relations” link, then the “Presentations” link.
A replay of the live conference call will be available from two
hours after the call until midnight on Tuesday, March 5, 2019. The
replay can be accessed by dialing (844) 512-2921, or (412) 317-6671
for international callers. The conference ID is 157878.
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 570 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, sales and guest traffic, costs, net
income, EBITDA, earnings per share, restaurant openings and
closures, capital expenditures, and statements under the heading
“Outlook for 2019”, 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 strategic initiatives, including the effectiveness of the
Company’s affordability, service and operational improvement,
technology, and off-premise initiatives to drive traffic and sales;
the ability to increase labor productivity through alternative
labor models, and to staff and train the Company’s workforce for
service execution, including the complexities related to growth of
multiple revenue streams in the restaurant; the success of the
Company’s re-franchising efforts; the effectiveness of the
Company’s marketing strategies and promotions to sustain and grow
comparable restaurant sales; 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; the ability to develop, test,
implement and increase online ordering, to-go services, catering,
and other off-premise sales; the ability to achieve savings to the
Company’s general and administrative expenses, which, by their
nature, tend to be fixed costs; the Company’s ability to repurchase
shares at all or at the times or in the amounts we currently
anticipate or to achieve anticipated benefits of a share repurchase
program; availability of capital or credit facility borrowings to
fund the Company’s remodeling and other capital expenditures; the
adequacy of cash flows or available debt resources to fund
operations and growth opportunities; 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.
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
data)
(Unaudited)
Twelve WeeksEnded
Thirteen WeeksEnded
Fifty-two WeeksEnded
Fifty-three WeeksEnded
December 30,2018
December 31,2017
December 30,2018
December 31,2017
Revenues: Restaurant revenue $ 300,897 $ 338,158 $ 1,316,209 $
1,365,060 Franchise and other revenue 5,882 5,770
22,354 22,506 Total revenues 306,779 343,928
1,338,563 1,387,566 Costs and expenses:
Restaurant operating costs (exclusive of depreciationand
amortization shown separately below): Cost of sales 71,112 80,203
313,504 320,355 Labor 104,449 115,286 456,262 475,432 Other
operating 40,779 44,734 182,084 178,309 Occupancy 26,047 28,626
114,146 112,753 Depreciation and amortization 22,036 22,070 95,371
92,545 General and administrative 18,335 21,874 84,087 93,277
Selling 17,408 16,818 62,371 63,379 Pre-opening costs — 835 2,092
5,570 Other charges 21,708 5,330 39,131 6,914
Total costs and expenses 321,874 335,776
1,349,048 1,348,534 (Loss) income from
operations (15,095 ) 8,152 (10,485 ) 39,032 Other expense:
Interest expense, net and other 2,838 2,543 10,925
10,012 (Loss) income before income taxes
(17,933 ) 5,609 (21,410 ) 29,020 Income tax (benefit) (7,299 )
(3,198 ) (14,991 ) (999 ) Net (loss) income $ (10,634 ) $ 8,807
$ (6,419 ) $ 30,019 (Loss) earnings per share: Basic
$ (0.82 ) $ 0.68 $ (0.49 ) $ 2.33 Diluted $ (0.82 ) $
0.68 $ (0.49 ) $ 2.31 Weighted average shares
outstanding: Basic 12,974 12,934 12,976 12,899 Diluted 12,974
13,036 12,976 12,998
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except per share
amounts)
December 30, 2018
December 31, 2017 Assets: Current Assets: Cash and
cash equivalents $ 18,569 $ 17,714 Accounts receivable, net 25,034
26,499 Inventories 27,370 29,553 Prepaid expenses and other current
assets 27,576 31,038 Total current assets 98,549
104,804 Property and equipment, net 565,142
638,151 Goodwill 95,838 96,979 Intangible assets, net 34,609 38,273
Other assets, net 49,803 32,408 Total assets $
843,941 $ 910,615
Liabilities and
Stockholders’ Equity: Current Liabilities: Accounts payable $
39,024 $ 35,347 Accrued payroll and payroll related liabilities
37,922 32,777 Unearned revenue 55,360 55,915 Accrued liabilities
and other 38,843 36,300 Total current liabilities
171,149 160,339 Deferred rent 77,115 74,980
Long-term debt 193,375 266,375 Long-term portion of capital lease
obligations 9,414 10,197 Other non-current liabilities 10,083
11,289 Total liabilities 461,136 523,180
Stockholders’ Equity: Common stock; $0.001 par value:
45,000 shares authorized; 17,851 and 17,851 shares issued; 12,971
and 12,954 shares outstanding 18 18 Preferred stock, $0.001 par
value: 3,000 shares authorized; no shares issued and outstanding —
— Treasury stock 4,880 and 4,897 shares, at cost (201,505 )
(202,485 ) Paid-in capital 212,752 210,708 Accumulated other loss,
net of tax (4,801 ) (3,566 ) Retained earnings 376,341
382,760 Total stockholders’ equity 382,805 387,435
Total liabilities and stockholders’ equity $ 843,941
$ 910,615
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 52 weeks ended December 30, 2018 and the 13 and
53 weeks ended December 31, 2017, net (loss) income and basic and
diluted earnings (loss) per share, excluding the effects of
litigation contingencies, reorganization costs, and the related
income tax effects. The Company believes the presentation of net
(loss) income 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 WeeksEnded
Thirteen WeeksEnded
Fifty-two WeeksEnded
Fifty-three WeeksEnded
December 30,2018
December 31,2017
December 30,2018
December 31,2017
Net (loss) income as reported $ (10,634 ) $ 8,807 $ (6,419 ) $
30,019 Asset impairment 18,483 5,330 28,127 6,914 Litigation
contingencies 795 — 4,795 — Smallwares disposal 2,430 — 2,936 —
Reorganization costs — — 3,273 — Income tax effect of reconciling
items (5,644 ) (1,175 ) (10,174 ) (1,793 ) Deferred tax liability
remeasurement due to Tax Act — (2,808 ) — (2,808 )
Adjusted net income $ 5,430 $ 10,154 $ 22,538
$ 32,332 Basic net income per share: Net (loss)
income as reported $ (0.82 ) $ 0.68 $ (0.49 ) $ 2.33 Asset
Impairment 1.43 0.41 2.17 0.54 Litigation contingencies 0.06 — 0.37
— Smallwares disposal 0.19 — 0.22 — Reorganization costs — — 0.25 —
Income tax effect of reconciling items (0.43 ) (0.09 ) (0.78 )
(0.14 ) Deferred tax liability remeasurement due to Tax Act —
(0.22 ) — (0.22 ) Adjusted earnings per share - basic
$ 0.43 $ 0.78 $ 1.74 $ 2.51
Diluted net (loss) income per share (1): Net (loss) income as
reported $ (0.82 ) $ 0.68 $ (0.49 ) $ 2.31 Asset Impairment 1.43
0.41 2.16 0.53 Litigation contingencies 0.06 — 0.37 — Smallwares
disposal 0.19 — 0.22 — Reorganization costs — — 0.25 — Income tax
effect of reconciling items (0.43 ) (0.09 ) (0.78 ) (0.13 )
Deferred tax liability remeasurement due to Tax Act — (0.22
) — (0.22 ) Adjusted earnings per share - diluted $ 0.43
$ 0.78 $ 1.73 $ 2.49 Weighted
average shares outstanding Basic 12,974 12,934 12,976 12,899
Diluted 13,033 13,036 13,057 12,998
Schedule II
Reconciliation of Non-GAAP Restaurant-Level
Operating Profit to Incomefrom Operations and Net (Loss)
Income(In thousands)
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, 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
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
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 (loss) income
from operations or net (loss) income as indicators of financial
performance. Restaurant-level operating profit as presented may not
be comparable to other similarly titled measures of other companies
in our industry. The table below sets forth certain unaudited
information for the 12 and 52 weeks ended December 30, 2018 and 13
and 53 weeks ended December 31, 2017, 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 WeeksEnded
Thirteen WeeksEnded
Fifty-two WeeksEnded
Fifty-three WeeksEnded
December 30,2018
December 31,2017
December 30,2018
December 31,2017
Restaurant revenue $ 300,897 98.1 % $ 338,158
98.3 % $ 1,316,209 98.3 % $ 1,365,060
98.4 % Restaurant operating costs (1): Cost of sales 71,112
23.6 % 80,203 23.7 % 313,504 23.8 % 320,355 23.5 % Labor 104,449
34.7 % 115,286 34.1 % 456,262 34.7 % 475,432 34.8 % Other operating
40,779 13.6 % 44,734 13.2 % 182,084 13.8 % 178,309 13.1 % Occupancy
26,047 8.7 % 28,626 8.5 % 114,146
8.7 % 112,753 8.3 % Restaurant-level
operating profit 58,510 19.4 % 69,309
20.5 % 250,213 19.0 % 278,211 20.4 %
Add – Franchise and other revenue 5,882 1.9 % 5,770 1.7 %
22,354 1.7 % 22,506 1.6 % Deduct – other operating: Depreciation
and amortization 22,036 7.2 % 22,070 6.4 % 95,371 7.1 % 92,545 6.7
% General and administrative expenses 18,335 6.0 % 21,874 6.4 %
84,087 6.3 % 93,277 6.7 % Selling 17,408 5.7 % 16,818 4.9 % 62,371
4.7 % 63,379 4.6 % Pre-opening costs — — % 835 0.2 % 2,092 0.2 %
5,570 0.4 % Other charges 21,708 7.1 % 5,330
1.5 % 39,131 2.9 % 6,914 0.5 %
Total other operating 79,487 26.0 % 66,927
19.4 % 283,052 21.2 % 261,685
18.9 % (Loss) income from operations (15,095 ) (4.9 )% 8,152
2.4 % (10,485 ) (0.8 )% 39,032 2.8 % Interest expense, net
and other 2,838 0.9 % 2,543 0.7 % 10,925 0.8 % 10,012 0.7 % Income
tax (benefit) (7,299 ) (2.4 )% (3,198 ) (0.9 )%
(14,991 ) (1.1 )% (999 ) (0.1 )% Total other (4,461 )
(1.5 )% (655 ) (0.2 )% (4,066 ) (0.3 )% 9,013
0.6 % Net (loss) income $ (10,634 )
(3.5 )% $ 8,807 2.6 % $ (6,419 ) (0.5 )% $
30,019 2.2 %
(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 (Loss) Income to
EBITDA and Adjusted EBITDA(In thousands, unaudited)
The Company defines EBITDA as net (loss) income before interest
expense, (benefit) for income taxes, and depreciation and
amortization. EBITDA and adjusted EBITDA are presented because the
Company believes 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
(loss) 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
(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.
Twelve WeeksEnded
Thirteen WeeksEnded
Fifty-two WeeksEnded
Fifty-three WeeksEnded
December 30,2018
December 31,2017
December 30,2018
December 31,2017
Net (loss) income as reported $ (10,634 ) $ 8,807 $ (6,419 ) $
30,019 Interest expense, net 2,550 2,821 10,675 10,918 Income tax
(benefit) (7,299 ) (3,198 ) (14,991 ) (999 ) Depreciation and
amortization 22,036 22,070 95,371 92,545
EBITDA 6,653 30,500 84,636 132,483
Asset Impairment 18,483 5,330 28,127 6,914 Litigation
contingencies 795 — 4,795 — Smallwares disposal 2,430 — 2,936 —
Reorganization costs — — 3,273 —
Adjusted EBITDA $ 28,361 $ 35,830 $ 123,767 $
139,397
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190226006126/en/
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