Red Robin Gourmet Burgers, Inc. Reports Results For The Fiscal Third Quarter Ended October 3, 2021
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Red Robin Gourmet Burgers, Inc. Reports Results For The Fiscal Third Quarter Ended October 3, 2021

GREENWOOD VILLAGE, Colo. - (BUSINESS WIRE) - November 10, 2021 - 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 October 3, 2021.

Key Highlights

  • Restaurant revenue of $270.2 million and Restaurant Level Operating Profit as a percentage of restaurant revenue (a non-GAAP metric) of 12.5%;
  • Third quarter 2021 comparable restaurant revenue(1) increased 34.3% over the same period in 2020, and increased 0.6% compared to the same period in 2019;
  • Improving comparable restaurant revenue(1) during the Company's third fiscal quarter, and positive 4.0% for the first period of the fourth fiscal quarter(3) compared to 2019, with the improving trajectory driven by strategic growth initiatives, and improvements in staffing levels;
  • Off-premises sales continue to sustain at high levels and comprised $81.0 million, $80.7 million and $35.0 million of comparable restaurant revenue for the third quarters of 2021, 2020 and 2019, respectively;
  • On track to launch two new mobile apps, iOS and Android, a new website ordering experience, and a new loyalty platform before the end of the year, creating an integrated digital ecosystem which we expect will improve traffic, order completion and average guest check; and
  • Restaurants that have been serving Donatos® pizza prior to 2021 are continuing to benefit from growing incremental sales beyond their first year as operations mature and brand affinity grows, with comparable restaurant revenue up 8.7% in the third quarter compared to 2019 in restaurants without supply chain impacts.

Comparable Restaurant Revenue for Third Quarter 2021 and First Fiscal Period for Fourth Quarter 2021 Compared to 2020 and 2019

The following table presents comparable restaurant revenue for the eighth, ninth, and tenth fiscal periods that comprised our third fiscal quarter, as well as the eleventh fiscal period, the first fiscal period of our fourth fiscal quarter:

2021 Comparable Restaurant Revenue Increase/Decrease, Compared to:

 

Period 8

 

Period 9

 

Period 10

 

Period 11(2)(3)

2020

 

50.5

 

%

 

31.9

 

%

 

22.1

%

 

24.0

%

2019

 

(0.8

)

%

 

(0.9

)

%

 

4.0

%

 

4.0

%

(2)

Period 11, which ended on October 31, 2021, includes the combined impact of reduced traffic due to storms on the West Coast and the Halloween shift from a Thursday to a Sunday, together negatively impacted comparable restaurant revenues by approximately (1.0)% to (2.0)%, compared to 2019.

(3)

The period ended October 31, 2021 falls within our fourth fiscal quarter, and amounts presented for the period are preliminary.

Paul J. B. Murphy III, Red Robin’s President and Chief Executive Officer, said, "Our confidence is strengthened by the positive trajectory in our sales and traffic trends over the past eight weeks, despite softness earlier in the third quarter due to concerns about the Delta variant and continued staffing and supply chain challenges. In fact, we believe there is more opportunity for upside through the remainder of the year and beyond by ensuring that each restaurant is effectively managed, optimally staffed, and our Team Members are well trained, enabling us to capture the full benefits of our proven strategic growth initiatives."

Murphy continued, "We have now sustained six consecutive quarters of off-premises sales at more than double 2019 levels, even as Guests return for in-person dining, while we continue to benefit from our value proposition and menu offerings, and our enhancements to the efficiency and accuracy of this burgeoning channel. Additionally, our successes with key initiatives this year, including continued Donatos pizza expansion, advancements in our digital ecosystem, and menu innovation demonstrate how we are differentiating Red Robin, expanding our market share and frequency, and supporting the ongoing execution of our business strategy."

(1)

Comparable restaurant revenue represents revenue from Company-owned restaurants that have operated five full quarters as of the end of the period presented.

Third Quarter 2021 Financial Summary Compared to 2020 and 2019

The following table presents financial highlights for the fiscal third quarter of 2021, compared to results from the same period in 2020 and 2019:

 

 

Twelve weeks

ended

 

 

October 3, 2021

 

October 4, 2020

 

October 6, 2019(1)

Total revenues (millions)

 

$

275.4

 

 

 

$

200.5

 

 

 

$

294.2

 

 

Restaurant revenues (millions)

 

$

270.2

 

 

 

$

197.0

 

 

 

$

289.9

 

 

Net loss (millions)

 

(15.0

)

 

 

(6.2

)

 

 

(1.8

)

 

Restaurant Level Operating Profit (millions)(3)

 

$

33.8

 

 

 

$

16.9

 

 

 

$

46.7

 

 

Restaurant Level Operating Profit Margin(3)

 

12.5

 

%

 

8.6

 

%

 

16.1

 

%

Adjusted EBITDA (millions)(2)

 

$

8.3

 

 

 

$

(0.7

)

 

 

$

14.7

 

 

 

 

 

 

 

 

 

Loss per diluted share ($ per share)

 

$

(0.95

)

 

 

$

(0.40

)

 

 

$

(0.14

)

 

Adjusted loss per diluted share ($ per share)(3)

 

$

(0.88

)

 

 

$

(0.19

)

 

 

$

(0.24

)

 

(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 per diluted share, a non-GAAP measure, to loss per diluted share, and a reconciliation of Restaurant level operating profit, a non-GAAP measure, to Loss from operations.

Third Quarter 2021 Operating Results

Comparable restaurant revenue(1) increased 34.3% in the third quarter of 2021 compared to the same period a year ago, driven by a 22.5% increase in Guest count and a 11.8% increase in average Guest check. The increase in average Guest check resulted from a 3.5% increase in pricing, and an 8.4% increase in menu mix, partially offset by a 0.1% decrease from higher discounts. The increase in menu mix was primarily driven by higher sales of beverages and our limited time menu offerings.

The increase in Net loss compared to 2020 was primarily due to a lower effective tax benefit, higher marketing spend, wage rates, and hiring and training costs, partially offset by a $73.2 million increase in restaurant revenue, primarily driven by favorable guest counts, menu mix, and pricing, lower labor costs due to staffing shortages and sales leverage. The increase in Adjusted EBITDA(2) was due to the aforementioned factors less the impact of Interest expense, Income tax benefits, and Depreciation and amortization, and Other charges.

$3.1 million of transitory labor and other operating costs were incurred due to staffing challenges, including hiring and training costs, temporarily outsourced janitorial costs, one time bonuses, and overtime pay.

The increase in Net loss compared to 2019 was primarily due to a $19.7 million decrease in restaurant revenue due to closed restaurants, higher third party delivery fees and supplies due to higher off-premises sales volumes and mix, increased wage rates and staffing costs, partially offset by pricing, menu mix, occupancy expenses for permanently closed restaurants and restructured leases, reduced headcount at the Restaurant Support Center, and reduced marketing spend associated with our emphasis on digital media in 2021. The decrease in Adjusted EBITDA(2) compared to 2019 was due to the aforementioned factors less the impact of Interest expense, Income tax benefits, and Depreciation and amortization, and Other charges.

Balance Sheet and Liquidity

The Company made net borrowings of $1.6 million on its Amended and Restated Credit Agreement (the "Credit Facility") during the third quarter of 2021. As of October 3, 2021, the Company had outstanding borrowings under its credit facility of $155.5 million, in addition to amounts issued under letters of credit of $8.6 million, and liquidity of approximately $75.2 million including cash on hand and available borrowing capacity under its credit facility. After giving effect to the $30 million capacity reduction on its revolving line of credit, effective on October 31, pursuant to the Second Amendment to our Credit Facility. The Company has made net repayments of $50.5 million on its Credit Facility since December 29, 2019.

In response to the continued uncertainty around the impact of industry labor and supply chain challenges as well as the COVID-19 Delta variant, the Company amended its current credit facility on November 9, 2021 to obtain additional flexibility to continue to implement our business strategy. The Company anticipates refinancing its Credit Facility in 2022.

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 for full year 2021:

  • Mid-single digit commodity and wage inflation.
  • Selling, general and administrative costs between $120 and $130 million.
  • Capital expenditures of $45 to $55 million, including continued investment in maintaining our restaurants and systems capital, Donatos® expansion to approximately 120 restaurants, including approximately 40 restaurants in our fourth fiscal quarter, digital guest and operational technology solutions, and off-premises execution enhancements.

Investor Conference Call and Webcast

Red Robin will host an investor conference call to discuss its third quarter 2021 results today at 5:00 p.m. ET. The conference call can be accessed live over the phone. The replay will be available through Wednesday, November 17, 2021.

RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

 

 

Twelve Weeks Ended

 

Forty Weeks Ended

 

 

October 3, 2021

 

October 4, 2020

 

October 3, 2021

 

October 4, 2020

Revenues:

 

 

 

 

 

 

 

 

Restaurant revenue

 

$

270,202

 

 

$

197,009

 

 

$

861,036

 

 

$

658,587

 

Franchise royalties, fees, and other revenue

 

5,242

 

 

3,469

 

 

17,658

 

 

9,078

 

Total revenues

 

275,444

 

 

200,478

 

 

878,694

 

 

667,665

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Cost of sales

 

62,671

 

 

46,037

 

 

193,754

 

 

155,243

 

Labor

 

99,725

 

 

74,344

 

 

310,333

 

 

255,652

 

Other operating

 

51,462

 

 

37,631

 

 

156,102

 

 

124,585

 

Occupancy

 

22,519

 

 

22,099

 

 

74,233

 

 

76,514

 

Depreciation and amortization

 

18,881

 

 

19,173

 

 

63,984

 

 

68,053

 

General and administrative

 

17,691

 

 

15,190

 

 

57,664

 

 

56,054

 

Selling

 

12,652

 

 

6,094

 

 

31,635

 

 

26,429

 

Pre-opening costs and acquisition costs

 

418

 

 

89

 

 

792

 

 

245

 

Other charges

 

1,561

 

 

4,416

 

 

9,228

 

 

138,296

 

Total costs and expenses

 

287,580

 

 

225,073

 

 

897,725

 

 

901,071

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

(12,136

)

 

(24,595

)

 

(19,031

)

 

(233,406

)

 

 

 

 

 

 

 

 

 

Other expense:

 

 

 

 

 

 

 

 

Interest expense, net and other

 

2,870

 

 

2,280

 

 

9,986

 

 

7,629

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(15,006

)

 

(26,875

)

 

(29,017

)

 

(241,035

)

Income tax benefit

 

(26

)

 

(20,696

)

 

(328

)

 

(4,297

)

Net loss

 

$

(14,980

)

 

$

(6,179

)

 

$

(28,689

)

 

$

(236,738

)

Loss per share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.95

)

 

$

(0.40

)

 

$

(1.83

)

 

$

(16.98

)

Diluted

 

$

(0.95

)

 

$

(0.40

)

 

$

(1.83

)

 

$

(16.98

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

15,709

 

 

15,540

 

 

15,647

 

 

13,945

 

Diluted

 

15,709

 

 

15,540

 

 

15,647

 

 

13,945

 

RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)

(Unaudited)

 

 

October 3, 2021

 

December 27, 2020

Assets:

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

17,757

 

 

$

16,116

 

Accounts receivable, net

 

11,939

 

 

16,510

 

Inventories

 

23,769

 

 

23,802

 

Income tax receivable

 

16,165

 

 

16,662

 

Prepaid expenses and other current assets

 

12,439

 

 

13,818

 

Total current assets

 

82,069

 

 

86,908

 

Property and equipment, net

 

388,881

 

 

427,033

 

Right of use assets, net

 

419,788

 

 

425,573

 

Intangible assets, net

 

22,419

 

 

24,714

 

Other assets, net

 

8,567

 

 

10,511

 

Total assets

 

$

921,724

 

 

$

974,739

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

Current Liabilities:

 

 

 

 

Accounts payable

 

$

34,638

 

 

$

20,179

 

Accrued payroll and payroll related liabilities

 

32,555

 

 

27,653

 

Unearned revenue

 

42,621

 

 

50,138

 

Current portion of lease obligations

 

49,894

 

 

55,275

 

Current portion of long-term debt

 

9,692

 

 

9,692

 

Accrued liabilities and other

 

42,240

 

 

39,617

 

Total current liabilities

 

211,640

 

 

202,554

 

Long-term debt

 

147,471

 

 

160,952

 

Long-term portion of lease obligations

 

450,673

 

 

465,233

 

Other non-current liabilities

 

15,775

 

 

25,287

 

Total liabilities

 

825,559

 

 

854,026

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

Common stock; $0.001 par value: 45,000 shares authorized; 20,449 shares issued; 15,722 and 15,548 shares outstanding as of October 3, 2021 and December 27, 2020

 

20

 

 

20

 

Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding as of October 3, 2021 and December 27, 2020

 

 

 

 

Treasury stock, 4,727 and 4,901 shares, at cost as of October 3, 2021 and December 27, 2020

 

(192,819

)

 

(199,908

)

Paid-in capital

 

240,445

 

 

243,407

 

Accumulated other comprehensive income (loss), net of tax

 

10

 

 

(4

)

Retained earnings

 

48,509

 

 

77,198

 

Total stockholders' equity

 

96,165

 

 

120,713

 

Total liabilities and stockholders' equity

 

$

921,724

 

 

$

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 forty weeks ended October 3, 2021, October 4, 2020 and October 6, 2019(1) Net (loss) income and basic and diluted (loss) earnings per share, excluding the effects of goodwill impairment, asset impairment, litigation contingencies, board and stockholder matters costs, restaurant closure and refranchising costs, severance costs, executive retention 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 items 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 3,

2021

 

October 4,

2020

 

October 6,

2019(1)

 

October 3,

2021

 

October 4,

2020

 

October 6,

2019(1)

Net loss as reported

 

$

(14,980

)

 

$

(6,179

)

 

$

(1,821

)

 

$

(28,689

)

 

$

(236,738

)

 

$

(201

)

Restaurant closure and refranchising costs

 

1,102

 

 

3,982

 

 

(3,922

)

 

5,301

 

 

12,990

 

 

$

(2,617

)

Asset impairment

 

 

 

 

 

 

 

1,357

 

 

20,779

 

 

14,064

 

Litigation contingencies

 

160

 

 

 

 

 

 

1,330

 

 

4,500

 

 

 

COVID-19 related costs

 

299

 

 

430

 

 

 

 

1,112

 

 

1,279

 

 

 

Board and stockholder matter costs

 

 

 

4

 

 

1,311

 

 

128

 

 

2,453

 

 

2,463

 

Severance costs

 

 

 

 

 

594

 

 

 

 

881

 

 

2,958

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

95,414

 

 

 

Executive retention

 

 

 

 

 

260

 

 

 

 

 

 

620

 

Income tax effect

 

(406

)

 

(1,148

)

 

457

 

 

(2,399

)

 

(35,957

)

 

(4,547

)

Adjusted net (loss) income

 

$

(13,825

)

 

$

(2,911

)

 

$

(3,121

)

 

$

(21,860

)

 

$

(134,399

)

 

$

12,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share - basic:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss as reported

 

$

(0.95

)

 

$

(0.40

)

 

$

(0.14

)

 

$

(1.83

)

 

$

(16.98

)

 

$

(0.02

)

Restaurant closure and refranchising costs

 

0.07

 

 

0.26

 

 

(0.30

)

 

0.34

 

 

0.93

 

 

(0.20

)

Asset impairment

 

 

 

 

 

 

 

0.09

 

 

1.49

 

 

1.08

 

Litigation contingencies

 

0.01

 

 

 

 

 

 

0.08

 

 

0.32

 

 

 

COVID-19 related costs

 

0.02

 

 

0.03

 

 

 

 

0.07

 

 

0.09

 

 

 

Board and stockholder matter costs

 

 

 

 

 

0.10

 

 

0.01

 

 

0.18

 

 

0.19

 

Severance and executive transition

 

 

 

 

 

0.05

 

 

 

 

0.06

 

 

0.23

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

6.84

 

 

 

Executive retention

 

 

 

 

 

0.02

 

 

 

 

 

 

0.05

 

Income tax effect

 

(0.03

)

 

(0.08

)

 

0.03

 

 

(0.16

)

 

(2.57

)

 

(0.35

)

Adjusted (loss) earnings per share - basic

 

$

(0.88

)

 

$

(0.19

)

 

$

(0.24

)

 

$

(1.40

)

 

$

(9.64

)

 

$

0.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss as reported

 

$

(0.95

)

 

$

(0.40

)

 

$

(0.14

)

 

$

(1.83

)

 

$

(16.98

)

 

$

(0.02

)

Restaurant closure and refranchising costs

 

0.07

 

 

0.26

 

 

(0.30

)

 

0.34

 

 

0.93

 

 

(0.20

)

Asset impairment

 

 

 

 

 

 

 

0.09

 

 

1.49

 

 

1.08

 

Litigation contingencies

 

0.01

 

 

 

 

 

 

0.08

 

 

0.32

 

 

 

COVID-19 related costs

 

0.02

 

 

0.03

 

 

 

 

0.07

 

 

0.09

 

 

 

Board and stockholder matter costs

 

 

 

 

 

0.10

 

 

0.01

 

 

0.18

 

 

0.19

 

Severance and executive transition

 

 

 

 

 

0.05

 

 

 

 

0.06

 

 

0.23

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

6.84

 

 

 

Executive retention

 

 

 

 

 

0.02

 

 

 

 

 

 

0.05

 

Income tax effect

 

(0.03

)

 

(0.08

)

 

0.03

 

 

(0.16

)

 

(2.57

)

 

(0.35

)

Adjusted (loss) earnings per share - diluted

 

$

(0.88

)

 

$

(0.19

)

 

$

(0.24

)

 

$

(1.40

)

 

$

(9.64

)

 

$

0.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

15,709

 

 

15,540

 

 

12,959

 

 

15,647

 

 

13,945

 

 

12,967

 

Diluted

 

15,709

 

 

15,540

 

 

12,959

 

 

15,647

 

 

13,945

 

 

13,047

 

(1)

Presented for improved comparability.

Schedule II

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Loss
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 forty weeks ended October 3, 2021, October 4, 2020, and October 6, 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

 

Forty Weeks Ended

 

 

October 3, 2021

 

October 4, 2020

 

October 6. 2019(2)

 

October 3, 2021

 

October 4, 2020

 

October 6, 2019(2)

Restaurant revenues

 

$270,202

 

98.1%

 

$197,009

 

98.3%

 

$289,862

 

98.5%

 

$861,036

 

98.0%

 

$658,587

 

98.6%

 

$992,764

 

98.1%

Restaurant operating costs(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

62,671

 

23.2

 

46,037

 

23.4

 

69,017

 

23.8

 

193,754

 

22.5

 

155,243

 

23.6

 

235,119

 

23.7

Labor

 

99,725

 

36.9

 

74,344

 

37.7

 

104,870

 

36.2

 

310,333

 

36.0

 

255,652

 

38.8

 

354,302

 

35.7

Other operating

 

51,462

 

19.0

 

37,631

 

19.1

 

44,317

 

15.3

 

156,102

 

18.1

 

124,585

 

18.9

 

142,882

 

14.4

Occupancy

 

22,519

 

8.3

 

22,099

 

11.2

 

24,942

 

8.6

 

74,233

 

8.6

 

76,514

 

11.6

 

85,420

 

8.6

Restaurant-level operating profit

 

33,825

 

12.5%

 

16,898

 

8.6%

 

46,716

 

16.1%

 

126,614

 

14.7%

 

46,593

 

7.1%

 

175,041

 

17.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add – Franchise royalties, fees, and other revenue

 

5,242

 

1.9%

 

3,469

 

1.7%

 

4,360

 

1.5

 

17,658

 

2.0%

 

9,078

 

1.4%

 

19,305

 

1.9%

Deduct – other operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

18,881

 

6.9

 

19,173

 

9.6

 

21,280

 

7.2

 

63,984

 

7.3

 

68,053

 

10.2

 

71,087

 

7.0%

General and administrative expenses

 

17,691

 

6.4

 

15,190

 

7.6

 

19,220

 

6.5

 

57,664

 

6.6

 

56,054

 

8.4

 

71,101

 

7.0%

Selling

 

12,652

 

4.6

 

6,094

 

3.0

 

17,556

 

6.0

 

31,635

 

3.6

 

26,429

 

4.0

 

49,025

 

4.8%

Pre-opening & acquisition costs

 

418

 

0.2

 

89

 

 

 

 

792

 

0.1

 

245

 

 

319

 

—%

Other charges (gains)

 

1,561

 

0.6

 

4,416

 

2.2

 

(1,757)

 

(0.6)

 

9,228

 

1.1

 

138,296

 

20.7

 

17,488

 

1.7%

Total other operating

 

51,203

 

18.6%

 

44,962

 

22.4%

 

56,299

 

19.1

 

163,303

 

18.6%

 

289,077

 

43.3%

 

209,020

 

20.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

(12,136)

 

(4.4)%

 

(24,595)

 

(12.3)%

 

(5,223)

 

(1.8)

 

(19,031)

 

(2.2)%

 

(233,406)

 

(35.0)%

 

(14,674)

 

(1.4)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net and other

 

2,870

 

1.0

 

2,280

 

1.1

 

1,812

 

0.6

 

9,986

 

1.1

 

7,629

 

1.1

 

7,203

 

0.7%

Income tax benefit provision

 

(26)

 

0.0

 

(20,696)

 

(10.3)

 

(5,214)

 

(1.8)

 

(328)

 

 

(4,297)

 

(0.6)

 

(21,676)

 

(2.1)%

Total other

 

2,844

 

1.0

 

(18,416)

 

(9.2)

 

(3,402)

 

(1.2)

 

9,658

 

1.1

 

3,332

 

0.5

 

(14,473)

 

(1.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$(14,980)

 

(5.4)%

 

$(6,179)

 

(3.1)%

 

$(1,821)

 

(0.6)%

 

$(28,689)

 

(3.3)%

 

$(236,738)

 

(35.5)%

 

$(201)

 

—%

________________________________________

(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 to EBITDA and Adjusted EBITDA
(In thousands, unaudited)

The Company defines EBITDA as net loss 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, asset impairment, litigation contingencies, board and stockholder matters costs, restaurant closure and refranchising costs, severance costs, executive retention 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 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. Providing Net loss 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, including asset impairments and income tax valuation adjustments. The reconciliations of adjusted EBITDA to Net loss 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 3,

2021

 

October 4,

2020

 

October 6,

2019(1)

 

October 3,

2021

 

October 4,

2020

 

October 6,

2019(1)

Net loss as reported

$

(14,980

)

 

$

(6,179

)

 

$

(1,821

)

 

$

(28,689

)

 

$

(236,738

)

 

$

(201

)

Interest expense, net

2,846

 

 

2,537

 

 

2,229

 

 

10,435

 

 

7,965

 

 

7,896

 

Income tax benefit

(26

)

 

(20,696

)

 

(5,214

)

 

(328

)

 

(4,297

)

 

(21,676

)

Depreciation and amortization

18,881

 

 

19,173

 

 

21,280

 

 

63,984

 

 

68,053

 

 

71,087

 

EBITDA

$

6,721

 

 

$

(5,165

)

 

$

16,474

 

 

$

45,402

 

 

$

(165,017

)

 

$

57,106

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant closure and refranchising costs (gains)

$

1,102

 

 

$

3,982

 

 

$

(3,922

)

 

$

5,301

 

 

$

12,990

 

 

$

(2,617

)

Asset impairment

 

 

 

 

 

 

1,357

 

 

20,779

 

 

14,064

 

Litigation contingencies

160

 

 

 

 

 

 

1,330

 

 

4,500

 

 

 

COVID-19 related costs

299

 

 

430

 

 

 

 

1,112

 

 

1,279

 

 

 

Board and stockholder matter costs

 

 

4

 

 

1,311

 

 

128

 

 

2,453

 

 

2,463

 

Severance costs

 

 

 

 

594

 

 

 

 

881

 

 

2,958

 

Goodwill impairment

 

 

 

 

 

 

 

 

95,414

 

 

 

Executive retention

 

 

 

 

260

 

 

 

 

 

 

620

 

Adjusted EBITDA

$

8,282

 

 

$

(749

)

 

$

14,717

 

 

$

54,630

 

 

$

(26,721

)

 

$

74,594

 

(1)

Presented for improved comparability.

SOURCE Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB)

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