CORRECTING and REPLACING Red Robin Gourmet Burgers Reports Earnings for the Fiscal Fourth Quarter and Year Ended December 30, 2007; Provides Guidance for Fiscal 2008
GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--
In the table titled "Condensed Consolidated Balance Sheets," the figure for "Property and equipment, net" for December 30, 2007 should read: $399,270 (sted $399,207).
The corrected release reads:
RED ROBIN GOURMET BURGERS REPORTS EARNINGS FOR THE FISCAL FOURTH QUARTER AND YEAR ENDED DECEMBER 30, 2007; PROVIDES GUIDANCE FOR FISCAL 2008
Red Robin Gourmet Burgers, Inc., (NASDAQ: RRGB), a casual dining restaurant chain focused on serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphere, today reported financial results for the 12 weeks and 52 weeks ended December 30, 2007, and provided guidance for fiscal year 2008.
Financial and Operational Highlights
Highlights for the 12 weeks ended December 30, 2007, compared to the 13 weeks ended December 31, 2006, are as follows:
-- Total revenues increased 12.3% to $183.8 million. Excluding
the additional operating week in 2006, total revenues
increased 23.1% over the fourth quarter a year ago.
-- Restaurant revenue increased 12.5% to $180.4 million.
Excluding the extra week in 2006, restaurant revenue increased
23.6% over the prior year.
-- Company-owned comparable restaurant sales increased 2.7%, on a
12-week comparable basis.
-- Restaurant-level operating profit increased 11.9% to $38.6
million. Excluding the additional operating week in 2006,
restaurant level operating profit increased 25.6%.
-- GAAP diluted earnings per share were $0.60 vs. $0.53 in
diluted earnings per share last year. The extra week in the
prior year benefited fourth quarter 2006 earnings by $0.11 per
diluted share.
-- A total of four new Red Robin(R) restaurants, three
company-owned and one franchised location, were opened during
the quarter.
Highlights for the 52 weeks ended December 30, 2007, compared to the 53 weeks ended December 31, 2006, are as follows:
-- Total revenues increased 23.4% to $763.5 million. Excluding
the extra week in 2006, total revenues for the fiscal year
increased 26.3% over the prior year.
-- Restaurant revenue increased 23.9% to $747.5 million.
Excluding the extra week in 2006, restaurant revenue in fiscal
2007 increased 26.9% over the prior year.
-- Company-owned comparable restaurant sales increased 2.4%, on a
52-week comparable basis.
-- Restaurant-level operating profit increased 19.5% to $153.0
million. Excluding the additional operating week in 2006,
restaurant level operating profit increased 23.1%.
-- GAAP diluted earnings per share were $1.82, which included a
charge of $0.08 per diluted share after tax for reacquired
franchise costs, a $0.01 charge per diluted share after tax
for acquisition related integration expenses and $0.07 per
diluted share in after- tax legal settlement expense, vs. GAAP
diluted earnings per share of $1.75 last year, which included
$0.07 per diluted share after tax for reacquired franchise
costs and an $0.11 per share benefit from the impact of the
extra week in 2006.
-- A total of 40 new Red Robin(R) restaurants, 26 company-owned
and 14 franchised locations, were opened in 2007.
"Overall, we were pleased with our financial results for the fourth quarter and full year 2007 as our performance benefited from our brand building investments, operating improvements and NRO initiatives," said Dennis Mullen, RRGB chairman and chief executive officer. "In 2008, we plan to expand our efforts to build our brand and to support new restaurant growth in both existing and emerging Red Robin markets, as well as continue our efforts to improve operating efficiencies to help mitigate cost pressures, all of which we believe will contribute to increased profitability and greater returns to our shareholders."
As of the end of fiscal 2007, there were 249 company-owned and 135 franchised Red Robin(R) restaurants, including one restaurant that the Company currently is managing for a California franchisee.
Acquisitions of Franchised Restaurants
In June of 2007, the Company acquired 15 existing franchised Red Robin restaurants and assumed management of an additional franchised restaurant in California. In July of 2007, the Company acquired an additional existing franchised restaurant and one restaurant that had been under construction in California. The 17 acquired restaurants and one managed restaurant are referred to collectively as the 2007 Acquired Restaurants.
To date in 2008, the Company has announced that it intends to acquire the assets of 15 Red Robin franchised restaurants for a combined purchase price of $29 million including eight existing restaurants in Wisconsin, three existing restaurants in Minnesota, three existing restaurants in northern Indiana, and one existing restaurant in New Jersey. The Company also plans to acquire an additional restaurant that is currently under construction in Wisconsin when it opens in May 2008. In addition, the acquisitions will allow the Company access to development rights where these restaurants are located - territories that were formerly subject to exclusivity provisions. The combined revenue from the 15 existing restaurants was approximately $41.8 million in 2007. The one additional Wisconsin restaurant that is still under construction is expected to open in May 2008.
Impact of 53rd Week in Fiscal 2006
The fiscal year ended December 30, 2007 was a 52-week year, and the fiscal fourth quarter of 2007 was a 12-week quarter, while the fiscal year and fourth quarter 2006 included 53 weeks, and 13 weeks, respectively. The calculation of the comparable restaurant sales increase for each period presented in 2007 was made on a 12-week fourth quarter and 52-week fiscal year comparable week basis.
Schedule II of this earnings release reconciles the impact on the net income and diluted earnings per share as reported on a GAAP basis in the fiscal fourth quarter and fiscal year of 2007 and 2006 to adjusted amounts excluding certain acquisition costs, legal settlement expenses and the extra week in fiscal 2006 fourth quarter and full year. The additional week in the fourth quarter and fiscal year 2006 contributed $14 million of additional revenue, $1.9 million in net income and $0.11 in diluted earnings per share to the Company's results. Excluding the impact of the extra week in the fourth quarter 2006 and the reacquired franchise costs from the 2006 acquisition, net income for the fiscal fourth quarter of 2007 would have increased 40.8% and net income per diluted share would have increased 39.5%. Excluding reacquired franchise costs and integration costs related to the 2007 Acquired Restaurants, legal settlement costs related to California wage and hour litigation, and the impact of the extra week in the fiscal year 2006 and the reacquired franchise costs from the 2006 acquisition, full year 2007 net income would have increased 16.1% and net income per diluted share would have increased 15.8%.
Fiscal Fourth Quarter 2007 Results
Comparable restaurant sales increased 2.7% for company-owned restaurants in the fiscal fourth quarter of 2007 compared to the fiscal fourth quarter of 2006, driven by a 4.2% increase in the average guest check which was partially offset by a 1.5% decline in guest counts. Average weekly comparable sales for company-owned restaurants were $62,873 in the fiscal fourth quarter of 2007, compared to $61,421 in the same period a year ago. Average weekly sales for non-comparable company-owned restaurants were $54,022 in the fiscal fourth quarter of 2007, compared to $53,557 in the fiscal fourth quarter a year ago. Average weekly comparable sales for the 2007 Acquired Restaurants were $64,957 in the fiscal fourth quarter of 2007.
Total Company revenues, which include company-owned restaurant sales and franchise royalties and fees, increased 12.3% to $183.8 million in the 12-week fiscal fourth quarter of 2007, versus $163.8 million for the thirteen weeks ended December 31, 2006. The 53rd week in the Company's 2006 fiscal calendar contributed approximately $14 million to fourth quarter 2006 revenues. Franchise royalties and fees increased 2.0% to $3.4 million in the fiscal fourth quarter of 2007 compared to the same period a year ago, offset partially by the reduction of royalty revenue from the 2007 Acquired Restaurants.
For the fiscal fourth quarter of 2007, the Company's franchise system reported an 11.0% decrease to $75.3 million in total U.S. franchise restaurant sales, compared to $84.6 million in the prior year period, due primarily to the 2007 Acquired Restaurants, as well as the additional week in the 2006 fourth quarter. Comparable sales in the fiscal fourth quarter of 2007 for franchise restaurants in the U.S. and Canada increased 1.3% and 6.0%, respectively, over the fiscal fourth quarter of 2006. Average weekly sales in the fiscal fourth quarter of 2007 for the Company's comparable franchise restaurants were $54,237 in the U.S., versus $55,487 for the same period the prior year, and C$48,809 in Canada versus C$45,772 in the same period last year. Canadian results are in Canadian dollars.
Restaurant-level operating profit margins at company-owned restaurants were 21.4% in the fiscal fourth quarter of 2007, compared to 21.5% in the fiscal fourth quarter of 2006. Excluding the 0.5% benefit to margins from the extra week in 2006, the restaurant level operating profit would have been 21.0% in the fourth quarter 2006. Higher cost of sales and higher restaurant operating costs primarily related to funding the company's national advertising fund in the fiscal fourth quarter 2007 were offset by lower labor costs.
The Company's restaurant-level operating profit metric does not represent income from operations or net income calculated in accordance with generally accepted accounting principles ("GAAP"). Schedule I of this earnings release reconciles restaurant-level operating profit to income from operations and net income for all periods presented.
General and administrative expense was $14.0 million in the fiscal fourth quarter of 2007 and $13.3 million in the fiscal fourth quarter of 2006, which were 7.6% and 8.1% of total revenue, respectively.
In the fiscal fourth quarter of 2007, the Company realized a reduction in the effective tax rate to 25.3%, which benefited diluted earnings per share by approximately $0.04.
Net income for the fiscal fourth quarter of 2007 was $10.1 million or $0.60 per diluted share, as compared to net income of $8.8 million, or $0.53 per diluted share, in the fiscal fourth quarter of 2006. Net income for the fiscal fourth quarter of 2007 included $1.5 million in pre-tax stock compensation expense, or $0.07 per diluted share, after tax. Net income for the fiscal fourth quarter of 2006 included $1.2 million in pre-tax stock compensation expense, or $0.05 per diluted share after tax. The 53rd week in the Company's 2006 fiscal calendar contributed approximately $1.9 million of net income and $0.11 per diluted share to fourth quarter 2006 results.
Fiscal Year 2007 Results
Comparable restaurant sales increased 2.4% for company-owned restaurants in the full year ended December 30, 2007, over the same period a year ago, driven by a 3.4% increase in the average guest check and a 1.0% decrease in guest counts. Average weekly comparable sales for company-owned restaurants were $64,047 in fiscal year 2007, compared to $63,729 in fiscal year 2006. Average weekly sales for non-comparable Company-owned restaurants were $56,635 in the fiscal year 2007, compared to $55,806 in fiscal year 2006. Average weekly comparable sales for the 2007 Acquired Restaurants were $64,783 for the time period post acquisition through fiscal year end 2007.
Total Company revenues, which include company-owned restaurant sales and franchise royalties and fees, increased 23.4% to $763.5 million for the 52 weeks ended December 30, 2007, compared to $618.7 million for the 53 weeks ended December 31, 2006. Franchise royalties and fees in the fiscal year 2007 increased 4.4% to $15.8 million compared to the same period a year ago. Fiscal year 2007 franchise royalties exclude royalty revenue from the franchise restaurants acquired since mid 2006.
For the fiscal year 2007, the Company's franchise system reported a decrease in total U.S. franchise restaurant sales of 2.6% to $354.8 million, compared to $364.3 million in fiscal year 2006, due primarily to franchise restaurants acquired since mid 2006, as well as the additional week in the Company's 2006 fiscal year. Comparable sales in fiscal year 2007 for franchise restaurants in the U.S. and Canada increased 2.5% and 7.7%, respectively, over the year ago comparable period. Average weekly sales in fiscal year 2007 for the Company's comparable franchise restaurants were $56,698 in the U.S., versus $58,459 for the same period in the prior year, and C$49,763 in Canada, versus C$46,473 in the same period last year. Canadian results are in Canadian dollars.
Restaurant-level operating profit margins from company-owned restaurants were 20.5% for fiscal year 2007 compared to 21.2% for the fiscal year of 2006. Excluding the 0.1% benefit to margins of the extra week in 2006, the restaurant level operating profit for fiscal year 2006 would have been 21.1%. Fiscal year 2007 restaurant-level operating profit margins were negatively impacted by higher cost of sales and higher restaurant operating costs primarily related to funding the Company's national advertising fund, which were partially offset by lower labor costs.
General and administrative expense was $61.8 million for the fiscal year 2007 compared to $51.4 million for the same period of 2006, which were 8.1% and 8.3% of total revenue in their respective periods.
In the fiscal year 2007, the Company incurred $1.8 million in pre-tax charges, or $0.08 per diluted share after tax, relating to the termination of franchise agreements for certain of the 2007 Acquired Restaurants, and $0.01 per diluted share after tax in charges related to integration of the acquisition recorded in general and administrative expenses. In the fiscal second quarter 2007, the Company incurred a legal settlement expense of $1.7 million pretax related to California wage and hour litigation, which decreased diluted earnings per share by $0.07.
Net income for the 52 weeks ended December 30, 2007 was $30.6 million or $1.82 per diluted share, compared to net income of $29.4 million or $1.75 per diluted share in the prior year period. Net income for fiscal 2007 includes $6.9 million in pre-tax stock compensation expense, or $0.29 per diluted share after tax, compared to $5.8 million in pre-tax stock compensation expense, or $0.24 per diluted share after tax, in the same period last year.
Outlook
For the first quarter of 2008, which is a 16-week quarter, the Company expects to open eight to nine new company-owned and one to two new franchised restaurants. Five new company-owned and one new franchised restaurants have already opened during the first quarter of 2008, and 10 company-owned and three franchise restaurants are currently under construction. During fiscal year 2008, the Company expects to open between 30 and 33 new company-owned units and franchisees are expected to open between nine and 11 new restaurants.
For the 2008 fiscal year, which is a 52-week year, the Company expects revenues of $880 to $893 million and net income of $2.00 to $2.20 per diluted share. These projected results are also based upon certain assumptions, including an expected comparable restaurant sales increase of approximately 2% to 3.5%, including a late March 2008 price increase of approximately 0.5%. Fiscal year 2008 financial guidance excludes the impact from the previously announced acquisitions of 15 Red Robin franchised restaurants, including reacquired franchise costs and acquisition-related integration expenses. The Company will update financial guidance after the acquisitions are closed.
The Company's annual financial guidance includes expansion of a national advertising campaign that will be funded by company-owned and franchised restaurants. Total 2008 spending is expected to be approximately $18.0 million to $19.0 million -- up from $11.5 million in fiscal year 2007 -- which will continue to be funded by a national advertising fund, whereby each restaurant in the system, company-owned and franchised, is contributing approximately 1.5% of their restaurant revenue in fiscal year 2008. The 2008 advertising campaign began on February 4, 2008, and will run for 24 weeks ending in mid November 2008.
Investor Conference Call and Webcast
Red Robin will host an investor conference call to discuss its fourth quarter and year-end results today at 5:00 p.m. ET. The conference call number is (888) 737-3699. To access the webcast, please visit www.redrobin.com and select the "Investors" link from the menu. The quarterly and fiscal year financial information that we intend to discuss during the conference call is included in this press release and will be available on the "Investors" link of the Company's website at www.redrobin.com following the conference call.
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., serves up wholesome, fun, feel-good experiences in a kid- and family-friendly environment. Red Robin(R) restaurants are famous for serving more than two dozen insanely delicious, high-quality gourmet burgers in a variety of recipes with Bottomless Steak Fries(R), as well as salads, soups, appetizers, entrees, desserts, and signature Mad Mixology(R) Beverages. There are more than 380 Red Robin(R) restaurants located across the United States and Canada, including corporate-owned locations and those operating under franchise agreements.
Forward-Looking Statements
Certain information and statements contained in this press release, including those under the heading "Outlook", are forward-looking statements. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are other than statements of historical facts. These statements may be identified, without limitation, by the use of forward-looking terminology such as "assumptions" "believes," "expects," "intends," "plan," "projected," or comparable terms or the negative thereof. All forward-looking statements included in this press release are based on information available to the Company on the date hereof. Such statements speak only as of the date hereof and we undertake no obligation to update any such statement to reflect events or circumstances arising after the date hereof. These statements are based on assumptions believed by us to be reasonable, and involve known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the following: our ability to achieve and manage our planned expansion, including both in new markets and existing markets; our ability to timely and successfully complete the announced franchise acquisitions; our ability to successfully integrate the acquired franchise restaurants; lack of awareness of our brand in new markets; higher percentage of operating weeks from non-comparable restaurants; concentration of less mature restaurants in the comp restaurant base which impacts profitability; the ability of our franchisees to open and manage new restaurants; changes in availability of capital or credit facility borrowings; effectiveness of our initiative to normalize new restaurant operations; the continued effectiveness of our new advertising strategy; the concentration of our restaurants in the Western United States; changes in the availability and costs of food; changes in labor costs; labor shortages, particularly in new markets; potential fluctuation in our quarterly operating results due to seasonality, increases in costs and other factors; the effect of increased competition in the casual dining market; changes in consumer preferences, general economic conditions or consumer discretionary spending; health concerns about our food products and food preparation; our ability to protect our intellectual property and proprietary information; the impact of federal, state or local government regulations relating to our team members or the sale of food or alcoholic beverages; the costs associated with pending litigation including diversion of management time and attention and any expense related to settlement of such matters; our franchisees' adherence to our practices, policies and procedures; and other risk factors described from time to time in the Company's 10-Q and 10-K filings with the SEC.
RED ROBIN GOURMET BURGERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
December 30, December 31,
2007 2006
------------ ------------
Assets:
Current Assets:
Cash and cash equivalents $ 12,914 $ 2,762
Accounts receivable, net 4,751 3,305
Inventories 10,367 8,486
Prepaid expenses and other current assets 9,246 5,885
Income tax receivable 4,760 5,862
Deferred tax asset 3,159 2,156
Restricted current assets--marketing funds 2,095 827
---------- ----------
Total current assets 47,292 29,283
---------- ----------
Property and equipment, net 399,270 351,736
Goodwill 56,299 43,496
Intangible assets, net 41,059 22,772
Other assets, net 4,869 3,311
---------- ----------
Total assets $ 548,789 $ 450,598
========== ==========
Liabilities and Stockholders' Equity:
Current Liabilities:
Trade accounts payable $ 9,263 $ 6,312
Construction related payables 13,416 17,839
Accrued payroll and payroll related
liabilities 29,146 19,144
Unredeemed gift certificates 10,789 9,374
Accrued liabilities 19,404 15,036
Accrued liabilities--marketing funds 2,095 827
Current portion of term loan notes payable 11,250 --
Current portion of long-term debt and
capital lease obligations 558 1,630
---------- ----------
Total current liabilities 95,921 70,162
---------- ----------
Deferred rent 21,728 18,076
Long-term portion of term loan notes payable 133,125 --
Other long-term debt and capital lease
obligations 8,813 112,341
Other non-current liabilities 4,760 6,486
---------- ----------
Total liabilities 264,347 207,065
---------- ----------
Commitments and contingencies
Stockholders' Equity:
Common stock 17 17
Treasury stock (83) (83)
Paid-in capital 156,928 146,614
Retained earnings 127,580 96,985
---------- ----------
Total stockholders' equity 284,442 243,533
---------- ----------
Total liabilities and stockholders' equity $ 548,789 $ 450,598
========== ==========
RED ROBIN GOURMET BURGERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
(Unaudited)
Fifty- Fifty-
Twelve Thirteen Two Three
----------------- -----------------
Weeks Ended Weeks Ended
----------------- -----------------
December December December December
30, 31, 30, 31,
2007 2006 2007 2006
-------- -------- -------- --------
Revenues:
Restaurant revenue $180,369 $160,353 $747,530 $603,391
Franchise royalties and fees 3,443 3,374 15,792 15,131
Rent revenue 25 38 150 199
-------- -------- -------- --------
Total revenues 183,837 163,765 763,472 618,721
-------- -------- -------- --------
Costs and expenses:
Restaurant operating costs:
Cost of sales 41,157 35,869 171,236 136,470
Labor 59,824 54,081 254,279 206,572
Operating 29,342 25,703 122,686 94,733
Occupancy 11,397 10,148 46,340 37,593
Depreciation and amortization 10,840 8,972 43,659 33,874
General and administrative
expenses 14,002 13,276 61,764 51,405
Pre-opening costs 1,279 1,848 7,463 8,491
Reacquired franchise costs -- 301 1,821 1,735
Legal settlement -- -- 1,653 --
-------- -------- -------- --------
Total costs and expenses 167,841 150,198 710,901 570,873
-------- -------- -------- --------
Income from operations 15,996 13,567 52,571 47,848
Other expense (income):
Interest expense, net 2,469 1,924 9,231 5,567
Other 27 2 42 (18)
-------- -------- -------- --------
Total other expenses 2,496 1,926 9,273 5,549
-------- -------- -------- --------
Income before income taxes 13,500 11,641 43,298 42,299
Provision for income taxes 3,410 2,820 12,647 12,937
-------- -------- -------- --------
Net income $ 10,090 $ 8,821 $ 30,651 $ 29,362
======== ======== ======== ========
Earnings per share:
Basic $ 0.60 $ 0.53 $ 1.84 $ 1.78
======== ======== ======== ========
Diluted $ 0.60 $ 0.53 $ 1.82 $ 1.75
======== ======== ======== ========
Weighted average shares
outstanding:
Basic 16,685 16,585 16,647 16,538
======== ======== ======== ========
Diluted 16,856 16,761 16,817 16,736
======== ======== ======== ========
RED ROBIN GOURMET BURGERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended
-----------------------
December December
30, 31,
2007 2006
----------- -----------
Cash Flows From Operating Activities:
Net income $ 30,651 $ 29,362
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 43,659 33,874
Provision (benefit) for deferred income
taxes (1,872) 4,722
Amortization of debt issuance costs 387 306
Stock-based compensation 6,871 5,776
Changes in operating assets and
liabilities, net of effects of acquired
business 13,862 4,485
--------- ---------
Net cash provided by operating
activities 93,558 78,525
--------- ---------
Cash Flows From Investing Activities:
Purchases of property and equipment (77,798) (95,365)
Acquisition of franchise restaurants, net
of cash acquired (47,854) (40,745)
Changes in marketing fund restricted cash 457 (753)
--------- ---------
Net cash used in investing activities (125,195) (136,863)
--------- ---------
Cash Flows From Financing Activities:
Borrowings of long-term debt 166,000 73,180
Payments of long-term debt and capital
leases (126,225) (17,997)
Proceeds from exercise of stock options
and employee stock purchase plan 2,245 2,207
Excess tax benefit related to exercise of
stock options 363 817
Debt issuance costs (594) (447)
--------- ---------
Net cash provided by financing
activities 41,789 57,760
--------- ---------
Net increase (decrease) in cash and cash
equivalents $ 10,152 $ (578)
Cash and cash equivalents, beginning of year 2,762 3,340
--------- ---------
Cash and cash equivalents, end of year $ 12,914 $ 2,762
========= =========
Schedule I
Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income
from Operations and Net Income
The Company defines restaurant-level operating profit to be restaurant
revenues minus restaurant-level operating costs, excluding restaurant
closures and impairment costs in the event closure or impairment
charges are incurred. It does not include general and administrative
costs, depreciation and amortization, franchise development costs and
pre-opening costs. The Company believes that restaurant-level
operating profit is an important measure of financial performance
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 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 generally
accepted accounting principles ("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. The table below sets
forth certain unaudited information for the twelve and fifty-two
weeks ended December 30, 2007 and the thirteen and fifty-three weeks
ended December 31, 2006, expressed as a percentage of total revenues,
except for the components of restaurant operating costs, which are
expressed as a percentage of restaurant revenues.
Twelve and Thirteen Weeks Ended
---------------------------------------
December 30, 2007 December 31, 2006
------------------- -------------------
Restaurant revenues $180,369 98.1% $160,353 97.9%
Restaurant operating costs:
Cost of sales 41,157 22.8 35,869 22.4
Labor 59,824 33.2 54,081 33.7
Operating 29,342 16.3 25,703 16.0
Occupancy 11,397 6.3 10,148 6.3
----------------------------------------
Restaurant-level operating
profit 38,649 21.4 34,552 21.5
----------------------------------------
Add - other revenues 3,468 1.9 3,412 2.1
Deduct - other operating:
Depreciation and
amortization 10,840 5.9 8,972 5.5
General and administrative 14,002 7.6 13,276 8.1
Pre-opening costs 1,279 0.7 1,848 1.1
Reacquired franchise costs -- -- 301 0.2
Legal settlement -- -- -- --
----------------------------------------
Total other operating 26,121 14.2 24,397 14.9
----------------------------------------
Income from operations 15,996 8.7 13,567 8.3
Total other expenses 2,496 1.4 1,926 1.2
Provision for income taxes 3,410 1.9 2,820 1.7
----------------------------------------
Total other 5,906 3.3 4,746 2.9
Net income $10,090 5.4% $8,821 5.4%
========================================
Fifty-Two and Fifty-Three Weeks Ended
---------------------------------------
December 30, 2007 December 31, 2006
------------------- -------------------
Restaurant revenues $747,530 97.9% $603,391 97.5%
Restaurant operating costs:
Cost of sales 171,236 22.9 136,470 22.6
Labor 254,279 34.0 206,572 34.2
Operating 122,686 16.4 94,733 15.7
Occupancy 46,340 6.2 37,593 6.2
---------------------------------------
Restaurant-level operating
profit 152,989 20.5 128,023 21.2
---------------------------------------
Add - other revenues 15,942 2.1 15,330 2.5
Deduct - other operating:
Depreciation and
amortization 43,659 5.7 33,874 5.5
General and administrative 61,764 8.1 51,405 8.3
Pre-opening costs 7,463 1.0 8,491 1.4
Reacquired franchise costs 1,821 0.2 1,735 0.3
Legal settlement 1,653 0.2 -- --
---------------------------------------
Total other operating 116,360 15.2 95,505 15.5
---------------------------------------
Income from operations 52,571 6.9 47,848 7.7
Total other expenses 9,273 1.2 5,549 0.9
Provision for income taxes 12,647 1.7 12,937 2.1
---------------------------------------
Total other 21,920 2.9 18,486 3.0
Net income $30,651 4.0% $29,362 4.7%
=======================================
Certain percentage amounts in the table above do not sum due to
rounding as well as the fact that restaurant operating costs are
expressed as a percentage of restaurant revenues, as opposed to total
revenues.
Schedule II
Reconciliation of Non-GAAP Results to GAAP Results
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 fifty-two week periods ended December 30, 2007, year-
over-year change in net income and diluted net income per share
excluding the acquisition-related integration costs, the reacquired
franchise costs, the legal settlement expense as described
previously, and the impact of the extra week in fiscal 2006. The
non-GAAP measurements are intended to supplement the presentation of
the Company's financial results in accordance with GAAP. The Company
believes that the presentation of these items provides additional
information to facilitate the comparison of past and present
financial results.
Twelve Weeks Thirteen Weeks
Ended Ended
--------------- --------------- Year Over Year
December 30, December 31, Percentage
2007 2006 Change
--------------- --------------- ---------------
Net Diluted Net Diluted Net Diluted
Income EPS Income EPS Income EPS
------- ------------------------------- -------
Reported $10,090 $ 0.60 $ 8,821 $ 0.53 14.4% 13.2%
After-tax impact of:
Acquisition integration
costs 6 -- -- --
Reacquired franchise
costs -- -- 228 0.01
Extra week in 2006 -- -- (1,879) (0.11)
------- ------- ------- -------
Adjusted $10,096 $ 0.60 $ 7,170 $ 0.43 40.8% 39.5%
======= ======= ======= =======
Fifty-Two Weeks Fifty-Three
Ended Weeks Ended
--------------- --------------- Year Over Year
December 30, December 31, Percentage
2007 2006 Change
--------------- --------------- ---------------
Net Diluted Net Diluted Net Diluted
Income EPS Income EPS Income EPS
------- ------------------------------- -------
Reported $30,651 $ 1.82 $29,362 $ 1.75 4.4% 4.0%
After-tax impact of:
Acquisition integration
costs 194 0.01 -- --
Reacquired franchise
costs 1,289 0.08 1,204 0.07
Legal settlement
expense 1,170 0.07 -- --
Extra week in 2006 -- -- (1,879) (0.11)
------- ------- ------- -------
Adjusted $33,304 $ 1.98 $28,687 $ 1.71 16.1% 15.8%
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Source: Red Robin Gourmet Burgers, Inc.
Released February 21, 2008