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 July 11, 2021.
Key Highlights
- Restaurant revenue of $272.2 million and Restaurant Level
Operating Profit as a percentage of restaurant revenue (a non-GAAP
metric) of 15.7%;
- Second quarter 2021 comparable restaurant revenue(1) increased
66.3% over the same period in 2020, and decreased 2.4% compared to
the same period in 2019;
- Average weekly sales per fiscal period grew by a total of
$2,503 during the second quarter of 2021;
- Off-premises sales comprised 32.8%, 63.8% and 12.5% of total
food and beverage sales for the second quarters of 2021, 2020 and
2019, respectively;
- By the end of the second fiscal quarter, restaurants that were
able to operate at 100% indoor dining capacity and with full hours
delivered a comparable restaurant revenue increase of 7.0% compared
to 2019 and restaurant margin of 19.5%, representing an increase of
1.8% compared to 2019; and,
- Restaurants that offered Donatos® pizza outperformed the rest
of the system by 550 basis points as compared to 2019 and
outperformed our original restaurant sales growth target by 250
basis points. Donatos® pizza generated sales of $2.9 million
dollars in the second quarter of 2021.
Paul J. B. Murphy III, Red Robin’s President and Chief Executive
Officer, said, "While we have reasons to be optimistic about the
recovery, overall performance in the second quarter was below our
expectation. Contributing factors included ongoing jurisdictional
restrictions and challenging labor availability which resulted in
reduced operating hours to ensure a quality Guest experience and
reduce impact on our restaurant management teams. Notably, we
generated strong sales and margins at restaurants where staffing
levels supported elevated traffic compared to 2019. Specific
initiatives that are addressing our staffing needs include national
hiring events, technology enhancements to the application and
hiring processes, and incremental hiring and training resources to
grow staffing levels above 2019."
Murphy continued, "Off-premises sales are holding at roughly a
third of total sales mix, more than double pre-pandemic levels,
demonstrating that Guests are enjoying the convenience of takeout
and delivery even as dining room sales recover. While we continue
to monitor developments regarding the COVID-19 variants, at this
time we remain confident that we can capture heightened demand with
full capacity, and restored staffing and operating hours, providing
substantial opportunity for additional sales. Importantly, our
conviction that Donatos® will be a long-term growth driver is
stronger than ever, with sales exceeding expectations and
positioning Red Robin to deliver annual pizza sales of over $60
million and profitability of over $25 million by 2023."
Second Quarter 2021 Financial Summary Compared to Second
Quarter 2020 and 2019
The following table presents financial highlights for the fiscal
second quarter of 2021, compared to results from the same period in
2020 and 2019:
Twelve weeks
ended
Twelve weeks ended
July 11, 2021
July 12, 2020
Change
July 14, 2019(1)
Change
Total revenues (millions)
$
277.0
$
161.1
71.9
%
$
308.0
(10.1
)%
Net (loss) income (millions)
(5.0
)
(56.3
)
(91.1
)%
1.0
*
Adjusted EBITDA (millions)(2)
$
19.0
$
(15.3
)
*
$
25.5
(25.6
)%
(Loss) income per diluted share ($ per
share)
$
(0.32
)
$
(4.09
)
(95.9
)%
$
0.08
*
Adjusted (loss) income per diluted share
($ per share)(3)
$
(0.22
)
$
(3.31
)
(95.5
)%
$
1.03
*
________________________
(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.
Second Quarter 2021 Operating Results
Comparable restaurant revenue(1) increased 66.3% in the second
quarter of 2021 compared to the same period a year ago, driven by a
47.7% increase in Guest count and a 18.6% increase in average Guest
check. The increase in average Guest check resulted from a 3.0%
increase in pricing, a 14.9% increase in menu mix, and a 0.7%
increase from lower discounts. The increase in menu mix was
primarily driven by higher sales of beverages and appetizers,
partially offset by lower gourmet burger mix. Comparable restaurant
revenue decreased 2.4% in the second quarter of 2021 compared to
the same period of fiscal year 2019. Average weekly sales per
fiscal period grew by a total of $2,503 during the second quarter
of 2021.
(1)
Comparable restaurant revenue,
representing revenue from Company-owned restaurants that have
operated five full quarters as of the end of the period
presented.
Twelve weeks ended
July 11, 2021
July 12, 2020
July 14, 2019
Average weekly sales per unit:
Company-owned – Total
$
53,135
$
32,287
$
52,907
Company-owned – Comparable
53,866
32,429
55,122
Franchised units – Comparable
$
57,416
$
33,835
$
55,580
Total operating weeks:
Company-owned units
5,122
4,960
5,716
Franchised units
1,212
1,116
1,075
________________________
System-wide restaurant revenue (which
includes franchised restaurants) for the second quarter of 2021
totaled $341.8 million, compared to $200.4 and $366.4 million for
the second quarter of 2020 and 2019, respectively.
Twelve weeks ended
July 11, 2021
July 12, 2020
July 14, 2019(1)
Restaurant sales (millions)
$
272.2
$
160.1
$
302.4
Restaurant level operating profit(2)
(millions)
$
42.7
$
3.2
$
55.0
Restaurant level operating profit
percentage(2)
15.7
%
2.0
%
18.2
%
________________________
(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(2) compared to
2020 was due to the following:
- Restaurant revenue increased by $112.0 million, primarily
driven by increased Guest traffic due to the continued lifting of
jurisdictional indoor dining restrictions;
- Cost of goods sold decreased by 140 basis points, primarily
driven by pricing, favorable mix shifts, and discounts, partially
offset by commodity inflation;
- Labor costs decreased by 280 basis points, primarily driven by
staffing shortages and sales leverage, partially offset by higher
wage rates, staffing costs and increased restaurant management
compensation costs in 2021. $1.6 million of incremental labor costs
were incurred due to increased hiring ads, incremental hiring and
training resources, and retention and sign-on bonuses to support
our staffing initiatives;
- Other operating expenses decreased by 440 basis points,
primarily driven by lower third party delivery fees and supplies
due to lower off-premises sales volumes, and sales leverage;
and
- Occupancy costs decreased by 510 basis points, primarily driven
by savings from permanently closed restaurants and restructuring of
lease payments, rent concessions, and sales leverage.
The decrease in restaurant-level operating profit compared to
2019 was due to the following:
- Restaurant revenue decreased $30.2 million, primarily driven by
reduced Guest traffic due to jurisdictional indoor dining
restrictions, and restaurant closures;
- Cost of goods sold decreased 110 basis points primarily driven
by pricing, lower discounts, and favorable rebates, partially
offset by commodity inflation;
- Labor costs increased 120 basis points primarily driven by
higher wage rates, and sales deleverage, partially offset by our
new management labor structure. $1.6 million of incremental labor
costs were incurred due to increased hiring ads, incremental hiring
and training resources, and retention and sign-on bonuses to
support our staffing initiatives;
- Other operating expenses increased 290 basis points primarily
driven by higher third party delivery fees and supplies due to
higher off-premises sales volumes, and hiring costs, and sales
deleverage; and
- Occupancy costs decreased 50 basis points primarily driven by
permanently closed restaurants, restructuring of lease payments and
rent concessions, and fewer restaurants, partially offset by sales
deleverage.
Twelve weeks ended
July 11, 2021
July 12, 2020
July 14, 2019(1)
General and administrative costs
(millions)
$
17.7
$
14.1
$
21.8
General and administrative costs as a
percentage of total revenues
6.4
%
8.8
%
7.1
%
(1) Presented for improved
comparability.
The increase in general and administrative costs in 2021 was
primarily driven by increased Team Member benefits, and temporary
salary reductions in 2020, partially offset by lower professional
services spend.
Twelve weeks ended
July 11, 2021
July 12, 2020
July 14, 2019(1)
Selling costs (millions)
$
10.6
$
5.6
$
13.4
Selling costs as a percentage of total
revenues
3.8
%
3.4
%
4.4
%
(1) Presented for improved
comparability.
The increase in selling costs in 2021 was primarily driven by
lapping the significant reduction in marketing spend in 2020 due to
the COVID-19 pandemic.
Balance Sheet and Liquidity
The Company made net repayments of $9.4 million on its Amended
and Restated Credit Agreement (the "credit facility") during the
Second quarter of 2021. As of July 11, 2021, the Company had
outstanding borrowings under its credit facility of $153.9 million,
in addition to amounts issued under letters of credit of $8.6
million, and liquidity of approximately $116.9 million including
cash on hand and available borrowing capacity under its credit
facility.
Income Taxes
The Company has filed federal and state cash tax refund claims
totaling approximately $16 million during 2021 from net operating
loss carrybacks. While we expect to receive a portion of the
refunds in 2021, due to government delays in processing these
claims we do not expect to receive the majority until 2022.
Restaurant Portfolio
The following table details restaurant unit data for
Company-owned and franchised locations for the periods
indicated:
Twelve Weeks Ended
Twenty-Eight Weeks
Ended
July 11, 2021
July 12, 2020
July 11, 2021
July 12, 2020
Company-owned:
Beginning of period
440
452
443
454
Closed during the period
(10
)
(2
)
(13
)
(4
)
End of period
430
450
430
450
Franchised:
Beginning of period
103
102
103
102
Closed during the period
(2
)
—
(2
)
—
End of period
101
102
101
102
Total number of restaurants
531
552
531
552
As of July 11, 2021, the Company had 430 total (comparable and
non-comparable) restaurants.
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:
- 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
80 restaurants in the second half of the fiscal year, digital guest
and operational technology solutions, and off-premises execution
enhancements;
- An effective tax benefit between 1% to 5%; and
- Selling, general and administrative costs between $125 and $135
million.
Investor Conference Call and Webcast
Red Robin will host an investor conference call to discuss its
second quarter 2021 results today at 5:00 p.m. ET. The conference
call can be accessed live over the phone by dialing (201) 689-8560.
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 13722144. The replay will be available through
Wednesday, August 25, 2021.
The call will be webcast live from the Company’s website at
ir.redrobin.com/news-events/ir-calendar, and later archived.
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 525 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; 2021
effective tax rate; 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; 2021 selling, general and
administrative spend; statements under the heading “Outlook for
2021 and Guidance Policy;” 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 and new variants 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)
Twelve Weeks Ended
Twenty-Eight Weeks
Ended
July 11, 2021
July 12, 2020
July 11, 2021
July 12, 2020
Revenues:
Restaurant revenue
$
272,157
$
160,144
$
590,834
$
461,578
Franchise royalties, fees, and other
revenue
4,818
978
12,416
5,609
Total revenues
276,975
161,122
603,250
467,187
Costs and expenses:
Restaurant operating costs (exclusive of
depreciation and amortization shown separately below):
Cost of sales
61,917
38,780
131,083
109,206
Labor
98,949
62,742
210,608
181,308
Other operating
46,928
34,663
104,640
86,954
Occupancy
21,614
20,758
51,714
54,415
Depreciation and amortization
19,215
20,560
45,103
48,880
General and administrative
17,718
14,141
39,973
40,864
Selling
10,628
5,556
18,983
20,335
Pre-opening costs and acquisition
costs
374
3
374
156
Other charges
2,196
14,501
7,667
133,880
Total costs and expenses
279,539
211,704
610,145
675,998
Loss from operations
(2,564
)
(50,582
)
(6,895
)
(208,811
)
Other expense:
Interest expense, net and other
2,786
1,979
7,116
5,349
Loss before income taxes
(5,350
)
(52,561
)
(14,011
)
(214,160
)
Income tax (benefit) provision
(354
)
3,700
(302
)
16,399
Net loss
$
(4,996
)
$
(56,261
)
$
(13,709
)
$
(230,559
)
Loss per share:
Basic
$
(0.32
)
$
(4.09
)
$
(0.88
)
$
(17.38
)
Diluted
$
(0.32
)
$
(4.09
)
$
(0.88
)
$
(17.38
)
Weighted average shares outstanding:
Basic
15,665
13,741
15,617
13,262
Diluted
15,665
13,741
15,617
13,262
RED ROBIN GOURMET BURGERS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except per
share amounts)
(Unaudited)
July 11, 2021
December 27, 2020
Assets:
Current Assets:
Cash and cash equivalents
$
25,569
$
16,116
Accounts receivable, net
11,323
16,510
Inventories
23,926
23,802
Income tax receivable
16,352
16,662
Prepaid expenses and other current
assets
12,342
13,818
Total current assets
89,512
86,908
Property and equipment, net
396,746
427,033
Right of use assets, net
424,647
425,573
Intangible assets, net
23,069
24,714
Other assets, net
8,129
10,511
Total assets
$
942,103
$
974,739
Liabilities and Stockholders'
Equity:
Current Liabilities:
Accounts payable
$
31,396
$
20,179
Accrued payroll and payroll related
liabilities
34,106
27,653
Unearned revenue
43,531
50,138
Current portion of lease obligations
51,022
55,275
Current portion of long-term debt
9,692
9,692
Accrued liabilities and other
44,258
39,617
Total current liabilities
214,005
202,554
Long-term debt
145,106
160,952
Long-term portion of lease obligations
457,896
465,233
Other non-current liabilities
15,933
25,287
Total liabilities
832,940
854,026
Stockholders' Equity:
Common stock; $0.001 par value: 45,000
shares authorized; 20,449 shares issued; 15,717 and 15,548 shares
outstanding as of July 11, 2021 and December 27, 2020
20
20
Preferred stock, $0.001 par value: 3,000
shares authorized; no shares issued and outstanding as of July 11,
2021 and December 27, 2020
—
—
Treasury stock, 4,732 and 4,901 shares, at
cost as of July 11, 2021 and December 27, 2020
(193,039
)
(199,908
)
Paid-in capital
238,677
243,407
Accumulated other comprehensive income
(loss), net of tax
16
(4
)
Retained earnings
63,489
77,198
Total stockholders' equity
109,163
120,713
Total liabilities and stockholders'
equity
$
942,103
$
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 twelve and twenty-eight weeks ended July 11, 2021, July
12, 2020 and July 14, 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.
Twelve Weeks Ended
Twenty-Eight Weeks
Ended
July 11, 2021
July 12, 2020
July 14, 2019(1)
July 11, 2021
July 12, 2020
July 14, 2019(1)
Net (loss) income as reported
$
(4,996
)
$
(56,261
)
$
981
$
(13,709
)
$
(230,559
)
$
1,620
Restaurant closure and refranchising
costs
1,752
7,602
1,001
4,199
9,008
1,305
Asset impairment
115
5,281
14,064
1,357
20,779
14,064
Litigation contingencies
85
—
—
1,170
4,500
—
COVID-19 related costs
244
651
—
813
849
—
Board and stockholder matter costs
—
967
1,152
128
2,449
1,152
Severance costs
—
—
370
—
881
2,364
Goodwill impairment
—
—
—
—
95,414
—
Executive retention
—
—
260
—
—
360
Income tax effect
(571
)
(3,770
)
(4,380
)
(1,993
)
(34,809
)
(5,004
)
Adjusted net (loss) income
$
(3,371
)
$
(45,530
)
$
13,448
$
(8,035
)
$
(131,488
)
$
15,861
(Loss) earnings per share - basic:
Net loss as reported
$
(0.32
)
$
(4.09
)
$
0.08
$
(0.88
)
$
(17.38
)
$
0.12
Restaurant closure and refranchising
costs
0.11
0.55
0.07
0.27
0.68
0.10
Asset impairment
0.01
0.38
1.08
0.09
1.57
1.08
Litigation contingencies
—
—
—
0.07
0.34
—
COVID-19 related costs
0.02
0.05
—
0.05
0.06
—
Board and stockholder matter costs
—
0.07
0.09
0.01
0.18
0.09
Severance and executive transition
—
—
0.03
—
0.07
0.18
Executive retention
—
—
0.02
—
—
0.03
Income tax effect
(0.04
)
(0.27
)
(0.34
)
(0.13
)
(2.62
)
(0.38
)
Adjusted (loss) earnings per share -
basic
$
(0.22
)
$
(3.31
)
$
1.03
$
(0.52
)
$
(9.91
)
$
1.22
(Loss) earnings per share - diluted:
Net loss as reported
$
(0.32
)
$
(4.09
)
$
0.08
$
(0.88
)
$
(17.38
)
$
0.12
Restaurant closure and refranchising
costs
0.11
0.55
0.07
0.27
0.68
0.10
Asset impairment
0.01
0.38
1.08
0.09
1.57
1.08
Litigation contingencies
—
—
—
0.07
0.34
—
COVID-19 related costs
0.02
0.05
—
0.05
0.06
—
Board and stockholder matter costs
—
0.07
0.09
0.01
0.18
0.09
Severance and executive transition
—
—
0.03
—
0.07
0.18
Executive retention
—
—
0.02
—
—
0.03
Income tax effect
(0.04
)
(0.27
)
(0.34
)
(0.13
)
(2.62
)
(0.38
)
Adjusted (loss) earnings per share -
diluted
$
(0.22
)
$
(3.31
)
$
1.03
$
(0.52
)
$
(9.91
)
$
1.22
Weighted average shares outstanding
Basic
15,665
13,741
12,970
15,617
13,262
12,969
Diluted
15,665
13,741
13,043
15,617
13,262
13,047
(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 twelve and twenty-eight weeks ended July 11, 2021, July 12,
2020, and July 14, 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.
Twelve Weeks Ended
Twenty-Eight Weeks
Ended
July 11, 2021
July 12, 2020
July 14. 2019(2)
July 11, 2021
July 12, 2020
July 14, 2019(2)
Restaurant revenues
$272,157
98.3
%
$160,144
99.4
%
$302,418
98.2
%
$590,834
97.9
%
$461,578
98.8
%
$702,902
97.9
%
Restaurant operating costs(1):
Cost of sales
61,917
22.8
38,780
24.2
72,387
23.9
131,083
22.2
109,206
23.7
166,102
23.6
%
Labor
98,949
36.4
62,742
39.2
106,538
35.2
210,608
35.6
181,308
39.3
249,432
35.5
%
Other operating
46,928
17.2
34,663
21.6
43,000
14.3
104,640
17.7
86,954
18.8
98,565
14.0
%
Occupancy
21,614
7.9
20,758
13.0
25,458
8.4
51,714
8.8
54,415
11.8
60,478
8.6
%
Restaurant-level operating profit
42,749
15.7
%
3,201
2.0
%
55,035
18.2
%
92,789
15.6
%
29,695
6.4
%
128,823
18.3
%
Add – Franchise royalties, fees, and other
revenue
4,818
1.7
%
978
0.6
%
5,563
1.8
12,416
2.1
%
5,609
1.2
%
14,945
2.1
%
Deduct – other operating:
Depreciation and amortization
19,215
6.9
20,560
12.8
21,369
6.9
45,103
7.5
48,880
10.5
49,807
6.9
%
General and administrative expenses
17,718
6.4
14,141
8.8
21,791
7.1
39,973
6.6
40,864
8.7
51,881
7.2
%
Selling
10,628
3.8
5,556
3.4
13,443
4.4
18,983
3.1
20,335
4.4
31,469
4.4
%
Pre-opening & acquisition costs
374
0.1
3
—
—
—
374
0.1
156
—
319
—
%
Other charges
2,196
0.8
14,501
9.0
16,847
5.5
7,667
1.3
133,880
28.7
19,245
2.7
%
Total other operating
50,131
18.1
%
54,761
34.0
%
73,450
23.8
112,100
18.6
%
244,115
52.3
%
152,721
21.3
%
Loss from operations
(2,564
)
(0.9
)%
(50,582
)
(31.4
)%
(12,852
)
(4.2
)
(6,895
)
(1.1
)%
(208,811
)
(44.7
)%
(9,451
)
(1.3
)%
Interest expense, net and other
2,786
1.0
1,979
1.2
2,153
0.7
7,116
1.2
5,349
1.1
5,391
0.8
%
Income tax (benefit) provision
(354
)
(0.1
)
3,700
2.3
(15,986
)
(5.2
)
(302
)
(0.1
)
16,399
3.5
(16,462
)
(2.3
)%
Total other
2,432
0.9
5,679
3.5
(13,833
)
(4.5
)
6,814
1.1
21,748
4.7
(11,071
)
(1.5
)%
Net (loss) income
$(4,996
)
(1.8
)%
$(56,261
)
(34.9
)%
$981
0.3
%
$(13,709
)
(2.3
)%
$(230,559
)
(49.4
)%
$1,620
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.
Twelve Weeks Ended
Twenty-Eight Weeks
Ended
July 11, 2021
July 12, 2020
July 14, 2019(1)
July 11, 2021
July 12, 2020
July 14, 2019(1)
Net (loss) income as reported
$
(4,996
)
$
(56,261
)
$
981
$
(13,709
)
$
(230,559
)
$
1,620
Interest expense, net
2,912
2,194
2,322
7,589
5,428
5,667
Income tax (benefit) provision
(354
)
3,700
(15,986
)
(302
)
16,399
(16,462
)
Depreciation and amortization
19,215
20,560
21,369
45,103
48,880
49,807
EBITDA
$
16,777
$
(29,807
)
$
8,686
$
38,681
$
(159,852
)
$
40,632
Restaurant closure and refranchising
costs
$
1,752
$
7,602
$
1,001
$
4,199
$
9,008
$
1,305
Asset impairment
115
5,281
14,064
1,357
20,779
14,064
Litigation contingencies
85
—
—
1,170
4,500
—
COVID-19 related costs
244
651
—
813
849
—
Board and stockholder matter costs
—
967
1,152
128
2,449
1,152
Severance costs
—
—
370
—
881
2,364
Goodwill impairment
—
—
—
—
95,414
—
Executive retention
—
—
260
—
—
360
Adjusted EBITDA
$
18,973
$
(15,306
)
$
25,533
$
46,348
$
(25,972
)
$
59,877
(1) Presented for improved
comparability.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210818005732/en/
For media relations questions: Danielle Paleafico, Coyne
PR (973) 588-2000
For investor relations questions: Raphael Gross, ICR
(203) 682-8253
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