Exhibit 99.1

 

Red Robin Gourmet Burgers Reports Results for the Fiscal Second Quarter Ended July 14, 2013

 

Greenwood Village, CO — August 15, 2013 — Red Robin Gourmet Burgers, Inc., (NASDAQ: RRGB), a casual dining restaurant chain serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphere, today reported financial results for the 12 weeks ended July 14, 2013.

 

Fiscal Second Quarter 2013 Financial Highlights:

 

·                  Earnings per diluted share were $0.77, compared to fiscal second quarter 2012 earnings per diluted share of $0.52.

·                  Total revenues increased 6.5% to $238.3 million; Company-owned comparable restaurant revenues increased 4.3% compared to the same period a year ago.

·                  Restaurant-level operating profit margin increased to 23.3% from 21.1% (See Schedule I).

 

Net income for the 12 weeks ended July 14, 2013, was $11.1 million compared to $7.7 million in the 12 weeks ended July 8, 2012.

 

Year to date through the Company’s fiscal second quarter 2013, net income was $20.6 million compared to $18.3 million for the comparable period in 2012.  Earnings per diluted share were $1.43, an increase of 16.3% compared to 2012 earnings per diluted share of $1.23.

 

“During the second quarter, we continued enhancing our menu to offer Red Robin guests greater variety and value while remaining true to our gourmet burger authority, contributing to revenue growth and continued market share gains in a tough casual dining environment,” said Steve Carley, Red Robin Gourmet Burgers, Inc. chief executive officer.  “Our most recent performance marks 12 consecutive quarters of same store sales growth and continued expansion of our operating margins.  Looking ahead, we remain focused on making even more progress on our strategic road map initiatives, including our brand transformation and other initiatives that are growing our base of loyal Red Robin fans and driving sustainable growth and profitability for our brand.”

 

Operating Results

 

Total Company revenues, which include Company-owned restaurant revenues and franchise royalties, increased 6.5% to $238.3 million in the second quarter of 2013 from $223.7 million in the fiscal second quarter of 2012.

 

System-wide restaurant revenues in the second quarter of 2013 totaled $324.1 million, compared to $306.8 million in the same period last year at constant currency rates.

 

Comparable restaurant revenues increased 4.3% for Company-owned restaurants in the second quarter of 2013 compared to the prior year.  In the second quarter, guest counts decreased 0.7% on a comparable basis while average guest check increased 5.0%.  The Company’s comparable revenue growth is calculated by comparing the same calendar weeks which, for 2012, vary from

 

1



 

the Company’s fiscal reporting by one week.  Year to date through the fiscal second quarter of 2013, comparable restaurant net revenues increased 3.1% compared to a year ago and were driven by a 3.7% increase in average guest check, partially offset by a 0.6% decrease in guest counts.

 

Restaurant-level operating profit margins at Company-owned restaurants were 23.3% in the second quarter of 2013 compared to 21.1% in the second quarter of 2012, an improvement of 220 basis points.  The higher margins resulted primarily from lower food and beverage costs, as well as lower insurance and other operating costs as a percentage of sales.  Schedule I 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.

 

Restaurant revenue performance

 

 

 

Q2 2013

 

Q2 2012

 

Average weekly sales per unit:

 

 

 

 

 

Company-owned* - Total

 

$

57,699

 

$

55,774

 

Company-owned* - Comparable

 

$

57,769

 

$

55,388

 

Franchised units

 

$

56,142

 

$

54,492

 

Total operating weeks:

 

 

 

 

 

Company-owned units

 

4,111

 

3,962

 

Franchised units

 

1,596

 

1,594

 

 


*Includes Company-owned casual dining restaurants only

 

Other Results

 

Depreciation and amortization costs were $13.3 million, an increase of $0.8 million from the second quarter of 2012 due primarily to the opening of new restaurants and the placing of new information technology systems into service.

 

General and administrative costs were $21.9 million, an increase of $3.0 million from the second quarter of 2012 due mainly to investments in talent to support value-enhancing initiatives and higher incentive-based compensation. Selling expenses were $6.5 million in the second quarter of 2013, a decrease from $6.7 million a year ago.

 

Net interest expense was $0.7 million, a decrease from $1.3 million during the same period a year ago as a result of the Company’s debt refinancing in December 2012 as well as lower average borrowings.

 

The Company had an effective tax rate of 24.3% in the second quarter of 2013, compared to a 23.7% rate in the same period a year ago.

 

Restaurant Openings

 

As of the end of the second quarter of 2013, there were 339 Company-owned Red Robin® restaurants, five Red Robin’s Burger Works® and 133 franchised Red Robin restaurants — a total of 477 locations.  In the second quarter of 2013, the Company opened two new Red Robin restaurants.

 

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Balance Sheet and Liquidity

 

On July 14, 2013, the Company had cash and cash equivalents of $16.5 million and total debt of $82.1 million, including $9.6 million of capital lease liabilities.

 

Year to date through the second quarter of 2013, cash generated from operations totaled $71.0 million compared to $50.1 million for the same period in 2012, and capital investments amounted to $31.7 million compared to $27.8 million through the second quarter of 2012.

 

Outlook for 2013

 

Red Robin’s 2013 fiscal year consists of 52 weeks ending on December 29, 2013, compared to fiscal 2012, which consisted of 53 weeks.

 

In 2013, the Company expects comparable restaurant sales growth of approximately 3.0% compared to 2012 based on a combination of increased prices and guests enjoying more items per visit.

 

The Company is expecting 2013 capital investments of approximately $70 million.  The Company plans to open 20 new company-owned Red Robin restaurants and potentially several Red Robin’s Burger Works restaurants.  The Company also intends to remodel 20 existing Red Robin restaurants as part of its brand transformation initiative.

 

Restaurant-level operating profit margins in 2013 are expected to be approximately 21.3%.

 

General and administrative costs are expected to be between $89 million and $90 million, while selling expenses are expected to be approximately 2.8% of sales.  Depreciation is projected to be between $59 million and $60 million.

 

The income tax rate in 2013 is expected to be approximately 24%.

 

The sensitivity of the Company’s earnings per diluted share to a 1% change in guest counts for fiscal 2013 is estimated to be $0.23 on an annualized basis.  Additionally, a 10 basis point change in restaurant-level operating margin is expected to impact earnings per diluted share by approximately $0.05, and a change of $187,000 in pre-tax income or expense is equivalent to approximately $0.01 per diluted share.

 

Investor Conference Call and Webcast

 

Red Robin will host an investor conference call to discuss its second quarter 2013 results today at 10:00 a.m. ET. The conference call number is (888) 670-2246, or for international callers (913) 312-1507.   The financial information that the Company intends 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. Prior to the conference call, the Company will post supplemental financial information that will be discussed during the call and live webcast.

 

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To access the supplemental financial information and webcast, please visit www.redrobin.com and select the “Investors” link from the menu. A replay of the live conference call will be available from two hours after the call until midnight on Thursday, August 22, 2013.  The replay can be accessed by dialing (877) 870-5176, or (858) 384-5517 for international callers. The conference ID is 6901079.   The webcast replay will also be available on the Company’s website until midnight on Sunday, October 6, 2013.

 

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., is the gourmet burger expert, famous for serving more than two dozen craveable, high-quality burgers with Bottomless Steak Fries® in a fun environment. Red Robin’s award-winning burgers have earned the title of Best Burger in the full-service category in the Zagat Fast Food Survey four years in a row. In addition to its many burger offerings, Red Robin serves a wide variety of salads, soups, appetizers, entrees, desserts and signature Mad Mixology® Beverages. There currently are 480 Red Robin locations across the United States and Canada, including 341 company-owned Red Robin restaurants and five Red Robin’s Burger Works locations, and 134 Red Robin restaurants operating under franchise agreements. Red Robin… YUMMM®! Connect with Red Robin on Facebook and Twitter.

 

Forward-Looking Statements:

 

Forward-looking statements in this press release regarding our expected earnings per share, restaurant sales, new restaurant growth, brand transformation initiative, future economic performance, costs and capital expenditures, certain statements under the heading “Outlook for 2013” 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,” or “estimate,”  or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements.  We undertake no obligation to update such statements to reflect events or circumstances arising after such date, and we caution 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 marketing strategies, loyalty program and guest count initiatives to achieve restaurant sales growth; the ability to fulfill planned expansion; the cost and availability of key food products, labor and energy; the ability to achieve anticipated revenue and cost savings from our anticipated new technology systems and other initiatives; availability of capital or credit facility borrowings; the adequacy of cash flows or available debt resources to fund operations and growth opportunities; federal, state and local regulation of our 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.

 

For media relations questions contact:

Kevin Caulfield, Senior Director of Communications

(303) 846-5470

 

For investor relations questions contact:

Stuart Brown, Chief Financial Officer

(303) 846-6000

 

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RED ROBIN GOURMET BURGERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)
(Unaudited)

 

 

 

Twelve Weeks Ended

 

Twenty-eight Weeks Ended

 

 

 

July 14, 2013

 

July 8, 2012

 

July 14, 2013

 

July 8, 2012

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Restaurant revenue

 

$

234,490

 

$

219,932

 

$

535,803

 

$

514,574

 

Franchise royalties, fees and other revenue

 

3,809

 

3,745

 

8,845

 

8,562

 

Total revenues

 

238,299

 

223,677

 

544,648

 

523,136

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Cost of sales

 

58,024

 

55,804

 

133,006

 

130,879

 

Labor

 

76,648

 

73,075

 

178,530

 

171,681

 

Other operating

 

28,463

 

28,877

 

65,553

 

66,282

 

Occupancy

 

16,779

 

15,790

 

39,352

 

36,904

 

Depreciation and amortization

 

13,319

 

12,532

 

31,153

 

29,184

 

General and administrative

 

21,868

 

18,881

 

50,835

 

44,381

 

Selling

 

6,518

 

6,693

 

15,159

 

15,070

 

Pre-opening costs

 

1,291

 

602

 

2,125

 

1,585

 

Total costs and expenses

 

222,910

 

212,254

 

515,713

 

495,966

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

15,389

 

11,423

 

28,935

 

27,170

 

 

 

 

 

 

 

 

 

 

 

Other expense:

 

 

 

 

 

 

 

 

 

Interest expense, net and other

 

674

 

1,267

 

1,763

 

3,100

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

14,715

 

10,156

 

27,172

 

24,070

 

Provision for income taxes

 

3,576

 

2,408

 

6,553

 

5,764

 

Net income

 

$

11,139

 

$

7,748

 

$

20,619

 

$

18,306

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.78

 

$

0.53

 

$

1.46

 

$

1.25

 

Diluted

 

$

0.77

 

$

0.52

 

$

1.43

 

$

1.23

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

14,209

 

14,607

 

14,134

 

14,609

 

Diluted

 

14,475

 

14,859

 

14,415

 

14,879

 

 

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RED ROBIN GOURMET BURGERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)
(Unaudited)

 

 

 

July 14, 2013

 

December 30, 2012

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

16,545

 

$

22,440

 

Accounts receivable, net

 

13,011

 

16,386

 

Inventories

 

19,885

 

18,371

 

Prepaid expenses and other current assets

 

9,651

 

13,439

 

Deferred tax asset and other

 

3,222

 

3,868

 

Total current assets

 

62,314

 

74,504

 

 

 

 

 

 

 

Property and equipment, net

 

418,582

 

413,258

 

Goodwill

 

62,525

 

62,525

 

Intangible assets, net

 

36,066

 

37,203

 

Other assets, net

 

9,699

 

9,642

 

Total assets

 

$

589,186

 

$

597,132

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Trade accounts payable

 

$

18,447

 

$

14,241

 

Construction related payables

 

6,894

 

4,694

 

Accrued payroll and payroll related liabilities

 

37,419

 

31,476

 

Unearned revenue, net

 

20,529

 

28,187

 

Accrued liabilities and other

 

28,986

 

23,685

 

Total current liabilities

 

112,275

 

102,283

 

 

 

 

 

 

 

Deferred rent

 

49,456

 

44,801

 

Long-term portion of credit facility

 

72,500

 

125,000

 

Long-term portion of capital lease obligations

 

8,830

 

9,211

 

Other non-current liabilities

 

9,243

 

8,918

 

Total liabilities

 

252,304

 

290,213

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

Common stock, $0.001 par value: 30,000 shares authorized; 17,781 and 17,499 shares issued; 14,281 and 13,999 shares outstanding

 

18

 

17

 

Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding

 

 

 

Treasury stock, 3,500 shares, at cost

 

(107,589

)

(107,589

)

Paid-in capital

 

195,267

 

185,974

 

Accumulated other comprehensive gain, net of tax

 

55

 

5

 

Retained earnings

 

249,131

 

228,512

 

Total stockholders’ equity

 

336,882

 

306,919

 

Total liabilities and stockholders’ equity

 

$

589,186

 

$

597,132

 

 

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Schedule I

 

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income

from Operations and Net Income

(In thousands, except percentage data)

 

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 revenues minus restaurant-level operating costs, excluding restaurant closures and impairment 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 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 twenty-eight weeks ended July 14, 2013 and July 8, 2012, expressed as a percentage of total revenues, except for the components of restaurant level operating profit, which are expressed as a percentage of restaurant revenues.

 

 

 

Twelve Weeks Ended

 

Twenty-eight Weeks Ended

 

 

 

July 14, 2013

 

July 8, 2012

 

July 14, 2013

 

July 8, 2012

 

Restaurant revenues

 

$

234,490

 

98.4

%

$

219,932

 

98.3

%

$

535,803

 

98.4

%

$

514,574

 

98.4

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

58,024

 

24.7

 

55,804

 

25.4

 

133,006

 

24.8

 

130,879

 

25.4

 

Labor

 

76,648

 

32.7

 

73,075

 

33.2

 

178,530

 

33.3

 

171,681

 

33.4

 

Other operating

 

28,463

 

12.1

 

28,877

 

13.1

 

65,553

 

12.2

 

66,282

 

12.9

 

Occupancy

 

16,779

 

7.2

 

15,790

 

7.2

 

39,352

 

7.3

 

36,904

 

7.2

 

Restaurant-level operating profit

 

54,576

 

23.3

 

46,386

 

21.1

 

119,362

 

22.3

 

108,828

 

21.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add — Franchise royalties, fees and other revenue

 

3,809

 

1.6

 

3,745

 

1.7

 

8,845

 

1.6

 

8,562

 

1.6

 

Deduct — other operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

13,319

 

5.6

 

12,532

 

5.6

 

31,153

 

5.7

 

29,184

 

5.6

 

General and administrative

 

21,868

 

9.2

 

18,881

 

8.4

 

50,835

 

9.3

 

44,381

 

8.5

 

Selling

 

6,518

 

2.7

 

6,693

 

3.0

 

15,159

 

2.8

 

15,070

 

2.9

 

Pre-opening costs

 

1,291

 

0.5

 

602

 

0.3

 

2,125

 

0.4

 

1,585

 

0.3

 

Total other operating

 

42,996

 

18.0

 

38,708

 

17.3

 

99,272

 

18.2

 

90,220

 

17.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

15,389

 

6.5

 

11,423

 

5.1

 

28,935

 

5.3

 

27,170

 

5.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net and other

 

674

 

0.3

 

1,267

 

0.6

 

1,763

 

0.3

 

3,100

 

0.6

 

Income tax expense

 

3,576

 

1.5

 

2,408

 

1.1

 

6,553

 

1.2

 

5,764

 

1.1

 

Total other

 

4,250

 

1.7

 

3,675

 

1.7

 

8,316

 

1.4

 

8,864

 

1.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

11,139

 

4.7

%

$

7,748

 

3.5

%

$

20,619

 

3.8

%

$

18,306

 

3.5

%

 

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 revenues and not total revenues.

 

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