Red Robin Gourmet Burgers Reports Results for the Fiscal Third Quarter Ended October 7, 2018

Red Robin Gourmet Burgers Reports Results for the Fiscal Third Quarter Ended October 7, 2018

GREENWOOD VILLAGE, Colo. - (BUSINESS WIRE) - Nov. 6, 2018 - 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 7, 2018.

Third Quarter 2018 Financial Highlights Compared to Third Quarter 2017

  • GAAP earnings per diluted share were $0.13 compared to $0.21;
  • Adjusted earnings per diluted share were $0.16 compared to $0.21 (see Schedule I);
  • Total revenues were $294.9 million, a decrease of 3.5%;
  • Off-premise sales increased 22.7%, now comprising 10.1% of total food and beverage sales;
  • Comparable restaurant revenue decreased 3.4% (using constant currency rates);
  • Comparable restaurant guest counts decreased 1.9%;
  • Cost of sales as a percentage of revenue remained flat at 23.8%; and
  • Restaurant labor costs as a percentage of restaurant revenue remained flat at 35.3%.

“We are pleased with our continued improvement in managing labor and food costs, fundamental to achieving sustainable profit growth when we regain top-line sales momentum. Our third quarter sales performance was the result of a decline in dine-in traffic, which we expected when we chose mid quarter to shift remaining media weight to later in the year,” said Denny Marie Post, Red Robin Gourmet Burgers, Inc. chief executive officer. “We took the last part of the third quarter to begin retraining all of our restaurant teams on peak-hour service standards based on our success in pilot locations. We believe this will ensure our restaurant teams are well-prepared for seasonally higher volume in the fourth quarter and we are encouraged that we are already seeing improvements in ticket and wait times.”

Operating Results

Total revenues, which primarily include Company-owned restaurant revenue and franchise royalties, decreased 3.5% to $294.9 million in the third quarter of 2018 from $305.7 million in the third quarter of 2017. Restaurant revenue decreased $10.9 million due to a $9.9 million, or 3.4%, decrease in comparable restaurant revenue, a $1.5 million decrease from closed restaurants, and a $0.4 million unfavorable foreign currency exchange impact, partially offset by a $0.9 million increase in revenue from new restaurant openings.

System-wide restaurant revenue (which includes franchised units) for the third quarter of 2018 totaled $351.0 million, compared to $361.0 million for the third quarter of 2017.

Comparable restaurant revenue(1) decreased 3.4% in the third quarter of 2018 compared to the same period a year ago, driven by a 1.5% decrease in average guest check and a 1.9% decrease in guest counts. The decrease in average guest check comprised a 3.0% decrease in menu mix, offset by a 1.5% increase in pricing. The Company’s comparable revenue growth is calculated by comparing the same calendar weeks which, for the third quarter of 2017, exclude the first week of the third quarter of 2017 and include the first week of the fourth quarter of 2017.

Net income was $1.7 million for the third quarter of 2018 compared to $2.7 million for the same period a year ago. Adjusted net income was $2.1 million for the third quarter of 2018 (see Schedule I).

Restaurant-level operating profit margin (a non-GAAP financial measure) was 16.8% in the third quarter of 2018 compared to 18.6% in the same period a year ago. Cost of sales as a percentage of restaurant revenue was flat due to increases in steak fries and the impact of higher Tavern mix, which were offset by decreases in ground beef and reductions in food waste. Restaurant labor costs as a percentage of restaurant revenue also remained flat as improvements in labor productivity offset higher average wage rates and sales deleverage. Other restaurant operating costs increased 120 basis points primarily due to sales deleverage and increases in restaurant technology, equipment repairs and maintenance, third-party delivery fees, and utility costs. Occupancy costs increased 60 basis points due to increases in real estate and personal property tax. 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, 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

 
          Q3 2018     Q3 2017
Average weekly sales per unit(1):                
Company-owned – Total         $ 49,995     $ 52,877
Company-owned – Comparable(2)         $ 50,282     $ 52,632
Franchised units – Comparable         $ 57,298     $ 57,619
Total operating weeks:                
Company-owned units         5,805     5,686
Franchised units         1,064     1,032
________________________________________
(1)   Calculated using constant currency rates. Using historical currency rates, the average weekly sales per unit in the third quarter of 2017 for Company-owned – Total and Company-owned – Comparable was $52,955 and $52,711. 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.
(2)   Using the same calendar weeks as compared to the third quarter 2018, the average weekly sales per unit in the third quarter of 2017, using constant currency rates, was $52,231.
     

Other Results

Depreciation and amortization costs increased to $21.8 million in the third quarter of 2018 from $21.3 million in the third quarter of 2017. The increase was primarily related to new restaurant technology implemented beginning in third quarter 2017 and new restaurants opened since the third quarter of 2017.

General and administrative costs were $16.8 million, or 5.7% of total revenues, in the third quarter of 2018, compared to $18.6 million, or 6.1% 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 $12.0 million, or 4.1% of total revenues, in the third quarter of 2018, compared to $15.2 million, or 5.0% of total revenues, during the same period in the prior year. The decrease was primarily due to our choice of shifting media spend to the fourth quarter of 2018.

Pre-opening costs were $0.4 million in the third quarter of 2018, compared to $1.5 million in the same period a year ago. The decrease was primarily due to the decrease in number of restaurant openings.

Other charges in the third quarter of 2018 included $0.5 million in reorganization costs.

The tax benefit was $2.2 million in the third quarter of 2018, compared to $0.7 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.

Earnings per diluted share for the third quarter of 2018 was $0.13 compared to earnings per diluted share of $0.21 in third quarter of 2017. Excluding charges of $0.03 per diluted share for reorganization costs, adjusted earnings per diluted share for the third quarter ended October 7, 2018 were $0.16. 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 2018, the Company opened two Red Robin restaurants and our franchisees opened one Red Robinrestaurant.

The following table details restaurant unit data for Company-owned and franchised locations for the periods indicated:

      Twelve Weeks Ended     Forty Weeks Ended
      October 7, 2018     October 1, 2017     October 7, 2018     October 1, 2017
Company-owned:                        
Beginning of period     484       472       480       465  
Opened during the period     2       7       8       16  
Acquired from franchisees                        
Closed during the period     (1 )           (3 )     (2 )
End of period     485       479       485       479  
Franchised:                        
Beginning of period     88       86       86       86  
Opened during the period     1             3       1  
Sold or closed during the period                       (1 )
End of period     89       86       89       86  
Total number of restaurants     574       565       574       565  
                                 

Balance Sheet and Liquidity

As of October 7, 2018, the Company had cash and cash equivalents of $20.4 million and total debt of $220.9 million, excluding $10.4 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 $0.5 million on its credit facility during the third quarter of 2018. As of October 7, 2018, the Company had outstanding borrowings under its credit facility of $220.0 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 4.03x as of October 7, 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 in the Annual Report on Form 10-K filed on February 21, 2017.

Outlook for 2018

Earnings per diluted share is projected to be in the range of $1.60 to $1.80 for full-year 2018.

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 third quarter 2018 results today at 5:00 p.m. ET. The conference call number is (888) 224-1005, or for international callers (323) 994-2093. 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, November 13, 2018. The replay can be accessed by dialing (844) 512-2921, or (412) 317-6671 for international callers. The conference ID is 2625863.

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, restaurant sales and guest traffic, earnings per share, new unit development, and statements under the heading “Outlook for 2018”, 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 Company’s affordability initiatives to drive traffic and sales; the effectiveness of the Company’s marketing strategies and promotions 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; the ability to develop, test, implement and increase online ordering, to-go services, catering, and other off-premise sales; the ability to increase labor productivity through alternative labor models, and to train our workforce for service execution complexities related to growth of multiple revenue streams in the restaurant; the success of our refranchising efforts; our 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; 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 Weeks Ended     Forty Weeks Ended
          October 7, 2018     October 1, 2017     October 7, 2018     October 1, 2017
Revenues:                                  
Restaurant revenue         $ 290,218       $ 301,100       $ 1,015,312       $ 1,026,902
Franchise and other revenue         4,659       4,600       16,472       16,737
Total revenues         294,877       305,700       1,031,784       1,043,639
                                   
Costs and expenses:                                  

Restaurant operating costs (exclusive of depreciation and amortization shown separately below):

                                 
Cost of sales         69,003       71,642       242,392       240,152
Labor         102,322       106,205       351,813       360,146
Other operating         43,612       41,454       141,305       133,575
Occupancy         26,629       25,868       88,099       84,127
Depreciation and amortization         21,819       21,258       73,335       70,475
General and administrative         16,763       18,562       65,752       71,402
Selling         12,017       15,152       44,963       46,563
Pre-opening costs         387       1,503       2,093       4,735
Other charges         520             17,422       1,584
Total costs and expenses         293,072       301,644       1,027,174       1,012,759
                                   
Income from operations         1,805       4,056       4,610       30,880
                                   
Other expense:                                  
Interest expense, net and other         2,295       2,032       8,087       7,469
                                   
Income (loss) before income taxes         (490 )     2,024       (3,477 )     23,411
Income tax (benefit) provision         (2,199 )     (690 )     (7,692 )     2,199
Net income         $ 1,709       $ 2,714       $ 4,215       $ 21,212
Earnings per share:                                  
Basic         $ 0.13       $ 0.21       $ 0.32       $ 1.65
Diluted         $ 0.13       $ 0.21       $ 0.32       $ 1.63
Weighted average shares outstanding:                                  
Basic         12,994       12,927       12,977       12,888
Diluted         13,054       13,023       13,064       12,986
                                   
                                   

 

RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
 
          (Unaudited)      
          October 7, 2018     December 31, 2017
Assets:                
Current Assets:                
Cash and cash equivalents         $ 20,368       $ 17,714  
Accounts receivable, net         12,801       26,499  
Inventories         29,197       29,553  
Prepaid expenses and other current assets         21,503       31,038  
Total current assets         83,869       104,804  
                 
Property and equipment, net         595,429       638,151  
Goodwill         96,548       96,979  
Intangible assets, net         35,632       38,273  
Other assets, net         43,337       32,408  
Total assets         $ 854,815       $ 910,615  
                 
Liabilities and Stockholders’ Equity:                
Current Liabilities:                
Accounts payable         $ 28,161       $ 35,347  
Accrued payroll and payroll related liabilities         35,248       32,777  
Unearned revenue         38,237       55,915  
Accrued liabilities and other         40,579       36,300  
Total current liabilities         142,225       160,339  
                 
Deferred rent         77,234       74,980  
Long-term debt         220,875       266,375  
Long-term portion of capital lease obligations         9,611       10,197  
Other non-current liabilities         10,698       11,289  
Total liabilities         460,643       523,180  
                 
Stockholders’ Equity:                
Common stock; $0.001 par value: 45,000 shares authorized; 17,851 and 17,851 shares issued; 12,996 and 12,954 shares outstanding         18       18  
Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding                
Treasury stock 4,855 and 4,897 shares, at cost         (200,748 )     (202,485 )
Paid-in capital         212,002       210,708  
Accumulated other loss, net of tax         (4,075 )     (3,566 )
Retained earnings         386,975       382,760  
Total stockholders’ equity         394,172       387,435  
Total liabilities and stockholders’ equity         $ 854,815       $ 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 40 weeks ended October 7, 2018and October 1, 2017, net income and basic and diluted earnings per share, excluding the effects of litigation contingencies, reorganization costs, and the related income tax effects. The Company believes the presentation of net income and earnings 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 7,
2018

   

October 1,
2017

   

October 7,
2018

   

October 1,
2017

Net income as reported     $ 1,709       $ 2,714       $ 4,215       $ 21,212  
Asset impairment                 9,643       1,584  
Litigation contingencies                 4,000        
Spiral menu disposal                 506        
Reorganization costs     520             3,273        
Income tax effect of reconciling items     (135 )           (4,529 )     (618 )
Adjusted net income     $ 2,094       $ 2,714       $ 17,108       $ 22,178  
                         
Basic net income per share:                        
Net income as reported     $ 0.13       $ 0.21       $ 0.32       $ 1.65  
Asset Impairment                 0.74       0.12  
Litigation contingencies                 0.31        
Spiral menu disposal                 0.04        
Reorganization costs     0.04             0.25        
Income tax effect of reconciling items     (0.01 )           (0.35 )     (0.05 )
Adjusted earnings per share - basic     $ 0.16       $ 0.21       $ 1.31       $ 1.72  
                         
Diluted net income per share (1):                        
Net income as reported     $ 0.13       $ 0.21       $ 0.32       $ 1.63  
Asset Impairment                 0.74       0.12  
Litigation contingencies                 0.31        
Spiral menu disposal                 0.04        
Reorganization costs     0.04             0.25        
Income tax effect of reconciling items     (0.01 )           (0.35 )     (0.04 )
Adjusted earnings per share - diluted     $ 0.16       $ 0.21       $ 1.31       $ 1.71  
                         
Weighted average shares outstanding                        
Basic     12,994       12,927       12,977       12,888  
Diluted     13,054       13,023       13,064       12,986  
                                 
                                 

Schedule II

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income
from Operations and Net Income
(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 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 in our industry. The table below sets forth certain unaudited information for the 12 and 40 weeks ended October 7, 2018 and October 1, 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 Weeks Ended   Forty Weeks Ended
      October 7, 2018   October 1, 2017   October 7, 2018   October 1, 2017
Restaurant revenue     $ 290,218     98.4 %   $ 301,100     98.5 %   $ 1,015,312     98.4 %   $ 1,026,902   98.4 %
Restaurant operating costs (1):                              
Cost of sales     69,003     23.8 %   71,642     23.8 %   242,392     23.9 %   240,152   23.4 %
Labor     102,322     35.3 %   106,205     35.3 %   351,813     34.7 %   360,146   35.1 %
Other operating     43,612     15.0 %   41,454     13.8 %   141,305     13.9 %   133,575   13.0 %
Occupancy     26,629     9.2 %   25,868     8.6 %   88,099     8.7 %   84,127   8.2 %
Restaurant-level operating profit     48,652     16.8 %   55,931     18.6 %   191,703     18.9 %   208,902   20.3 %
                               
Add – Franchise and other revenue     4,659     1.6 %   4,600     1.5 %   16,472     1.6 %   16,737   1.6 %
Deduct – other operating:                              
Depreciation and amortization     21,819     7.4 %   21,258     7.0 %   73,335     7.1 %   70,475   6.8 %
General and administrative expenses     16,763     5.7 %   18,562     6.1 %   65,752     6.4 %   71,402   6.8 %
Selling     12,017     4.1 %   15,152     5.0 %   44,963     4.4 %   46,563   4.5 %
Pre-opening costs     387     0.1 %   1,503     0.5 %   2,093     0.2 %   4,735   0.5 %
Other charges     520     0.2 %       0.0 %   17,422     1.7 %   1,584   0.2 %
Total other operating     51,506     17.5 %   56,475     18.5 %   203,565     19.7 %   194,759   18.7 %
                               
Income from operations     1,805     0.6 %   4,056     1.3 %   4,610     0.4 %   30,880   3.0 %
                               
Interest expense, net and other     2,295     0.8 %   2,032     0.7 %   8,087     0.8 %   7,469   0.7 %
Income tax (benefit) provision     (2,199 )   (0.7 )%   (690 )   (0.2 )%   (7,692 )   (0.7 )%   2,199   0.2 %
Total other     96     %   1,342     0.4 %   395     0.0 %   9,668   0.9 %
                               
Net income     $ 1,709     0.6 %   $ 2,714     0.9 %   $ 4,215     0.4 %   $ 21,212   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 to EBITDA and Adjusted EBITDA
(In thousands, unaudited)

The Company defines EBITDA as net income before interest expense, provision (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 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 7, 2018     October 1, 2017     October 7, 2018     October 1, 2017
Net income as reported     $ 1,709       $ 2,714       $ 4,215       $ 21,212
Interest expense, net     2,390       2,222       8,125       8,097
Income tax (benefit) provision     (2,199 )     (690 )     (7,692 )     2,199
Depreciation and amortization     21,819       21,258       73,335       70,475
EBITDA     23,719       25,504       77,983       101,983
                         
Asset Impairment                 9,643       1,584
Litigation contingencies                 4,000      
Spiral menu disposal                 506      
Reorganization costs     520             3,273      
Adjusted EBITDA     $ 24,239       $ 25,504       $ 95,405       $ 103,567

Contacts:

Brian Farley
For media relations questions
Coyne PR
973-588-2000

PJ Adler
For investor relations questions
Red Robin Investor Relations
303-846-5040

View source version on businesswire.com: https://www.businesswire.com/news/home/20181106005888/en/

Source: Red Robin Gourmet Burgers, Inc.

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