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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    
For the quarterly period ended October 4, 2020

or
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            


Commission File Number: 001-34851

RED ROBIN GOURMET BURGERS, INC.
(Exact name of registrant as specified in its charter)
Delaware84-1573084
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
6312 S. Fiddlers Green Circle, Suite 200N
Greenwood Village, Colorado    
        80111
(Address of principal executive offices)             (Zip Code)

(303) 846-6000
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated FilerAccelerated Filer
Non-accelerated FilerSmaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par valueRRGBNASDAQ(Global Select Market)

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
As of November 4, 2020, there were 15,541,851 shares of the registrant's common stock, par value of $0.001 per share outstanding.


Table of Contents
RED ROBIN GOURMET BURGERS, INC.
TABLE OF CONTENTS
  Page

i

Table of Contents
PART I — FINANCIAL INFORMATION
ITEM 1.    Financial Statements (unaudited)
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except for share amounts)October 4, 2020December 29, 2019
Assets:
Current assets:
Cash and cash equivalents$27,367 $30,045 
Accounts receivable, net9,024 22,372 
Inventories24,496 26,424 
Income tax receivable63,066 5,308 
Prepaid expenses and other current assets11,652 21,338 
Total current assets135,605 105,487 
Property and equipment, net446,083 518,013 
Right of use assets, net415,948 426,248 
Goodwill 96,397 
Intangible assets, net25,440 29,975 
Other assets, net10,195 61,460 
Total assets$1,033,271 $1,237,580 
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable$18,940 $33,040 
Accrued payroll and payroll-related liabilities26,878 35,221 
Unearned revenue42,564 54,223 
Current portion of lease obligations62,032 42,699 
Current portion of long-term debt9,692  
Accrued liabilities and other42,987 29,403 
Total current liabilities203,093 194,586 
Long-term debt206,375 206,875 
Long-term portion of lease obligations450,751 465,435 
Other non-current liabilities19,858 10,164 
Total liabilities880,077 877,060 
Stockholders' equity:
Common stock; $0.001 par value: 45,000 shares authorized; 20,449 and 17,851 shares issued; 15,548 and 12,923 shares outstanding as of October 4, 2020 and December 29, 2019
20 18 
Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding as of October 4, 2020 and December 29, 2019
  
Treasury stock 4,901 and 4,928 shares, at cost, as of October 4, 2020 and December 29, 2019
(199,908)(202,313)
Paid-in capital242,048 213,922 
Accumulated other comprehensive loss, net of tax(5,494)(4,373)
Retained earnings116,528 353,266 
Total stockholders' equity153,194 360,520 
Total liabilities and stockholders' equity
$1,033,271 $1,237,580 
See Notes to Condensed Consolidated Financial Statements.
1

Table of Contents
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
Twelve Weeks EndedForty Weeks Ended
(in thousands, except for share amounts)October 4, 2020October 6, 2019October 4, 2020October 6, 2019
Revenues:
Restaurant revenue$197,009 $289,862 $658,587 $992,764 
Franchise and other revenues3,469 4,360 9,078 19,305 
Total revenues200,478 294,222 667,665 1,012,069 
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Cost of sales46,037 69,017 155,243 235,119 
Labor74,344 104,870 255,652 354,302 
Other operating37,631 44,317 124,585 142,882 
Occupancy22,099 24,942 76,514 85,420 
Depreciation and amortization19,173 21,280 68,053 71,087 
Selling, general, and administrative expenses
21,284 36,776 82,483 120,126 
Pre-opening costs89  245 319 
Other charges
4,416 (1,757)138,296 17,488 
Total costs and expenses225,073 299,445 901,071 1,026,743 
Loss from operations(24,595)(5,223)(233,406)(14,674)
Other expense:
Interest expense, net and other2,280 1,812 7,629 7,203 
Loss before income taxes(26,875)(7,035)(241,035)(21,877)
Income tax benefit(20,696)(5,214)(4,297)(21,676)
Net loss$(6,179)$(1,821)$(236,738)$(201)
Loss per share:
Basic$(0.40)$(0.14)$(16.98)$(0.02)
Diluted$(0.40)$(0.14)$(16.98)$(0.02)
Weighted average shares outstanding:
Basic15,540 12,959 13,945 12,967 
Diluted15,540 12,959 13,945 12,967 
Other comprehensive income (loss):
Foreign currency translation adjustment$9 $(262)$(1,121)$(185)
Other comprehensive income (loss), net of tax9 (262)(1,121)(185)
Total comprehensive loss$(6,170)$(2,083)$(237,859)$(386)
See Notes to Condensed Consolidated Financial Statements.
2

Table of Contents
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Common StockTreasury StockAccumulated
Other
Comprehensive
Loss,
net of tax
Paid-in
Capital
Retained
Earnings
(in thousands)SharesAmountSharesAmountTotal
Balance, December 29, 201917,851 $18 4,928 $(202,313)$213,922 $(4,373)$353,266 $360,520 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (39)1,605 (1,388)— — 217 
Acquisition of treasury stock— — 72 (1,635)— — — (1,635)
Non-cash stock compensation— — — — 712 — — 712 
Net loss— — — — — — (174,298)(174,298)
Other comprehensive loss— — — — — (1,147)— (1,147)
Balance, April 19, 202017,851 $18 4,961 $(202,343)$213,246 $(5,520)$178,968 $184,369 
Issuance of common stock, $0.001 par value, net of stock issuance costs
2,598 2 — — 28,723 — — 28,725 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (59)2,398 (2,228)— — 170 
Non-cash stock compensation— — — — 1,071 — — 1,071 
Net loss— — — — — — (56,261)(56,261)
Other comprehensive income— — — — — 17 — 17 
Balance, July 12, 202020,449 $20 4,902 $(199,945)$240,812 $(5,503)$122,707 $158,091 
Issuance of common stock, $0.001 par value, net of stock issuance costs— — — — (7)— — (7)
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (1)37 (73)— — (36)
Non-cash stock compensation— — — — 1,316 — — 1,316 
Net loss— — — — — — (6,179)(6,179)
Other comprehensive income— — — — — 9 — 9 
Balance, October 4, 202020,449 $20 4,901 $(199,908)$242,048 $(5,494)$116,528 $153,194 
See Notes to Condensed Consolidated Financial Statements.
3

Table of Contents
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Common StockTreasury StockAccumulated
Other
Comprehensive
Loss,
net of tax
Paid-in
Capital
Retained
Earnings
(in thousands)SharesAmountSharesAmountTotal
Balance, December 30, 201817,851 $18 4,880 $(201,505)$212,752 $(4,801)$376,341 $382,805 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (32)1,344 (1,204)— — 140 
Acquisition of treasury stock— — 31 (974)— — — (974)
Non-cash stock compensation— — — — 477 — — 477 
Net income— — — — — — 639 639 
Other comprehensive loss— — — — — (329)— (329)
Topic 842 transition impairment, net of tax— — — — — — (15,172)(15,172)
Balance, April 21, 201917,851 $18 4,879 $(201,135)$212,025 $(5,130)$361,808 $367,586 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (30)1,208 (907)— — 301 
Acquisition of treasury stock— — 17 (501)— — — (501)
Non-cash stock compensation— — — — 941 — — 941 
Net income— — — — — — 981 981 
Other comprehensive income— — — — — 406 — 406 
Balance July 14, 201917,851 $18 4,866 $(200,428)$212,059 $(4,724)$362,789 $369,714 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (1)37 (44)— — (7)
Acquisition of treasury stock— — 29 (959)— — — (959)
Non-cash stock compensation— — — — 1,126 — — 1,126 
Net loss— — — — — — (1,821)(1,821)
Other comprehensive loss— — — — — (262)— (262)
Balance, October 6, 201917,851 $18 4,894 $(201,350)$213,141 $(4,986)$360,968 367,791
See Notes to Condensed Consolidated Financial Statements.
4

Table of Contents
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Forty Weeks Ended
(in thousands)October 4, 2020October 6, 2019
Cash flows from operating activities:
Net loss$(236,738)$(201)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization68,053 71,087 
Gift card breakage(2,329)(4,899)
Goodwill and restaurant asset impairment116,193 14,064 
Non-cash other charges(2,438)(11,135)
Deferred income tax provision (benefit)52,439 (27,477)
Stock-based compensation expense3,082 2,539 
Other, net639 665 
Changes in operating assets and liabilities:
Accounts receivable13,250 14,059 
Income tax receivable(57,756)941 
Prepaid expenses and other current assets11,229 1,426 
Lease assets, net of liabilities19,194 (266)
Trade accounts payable and accrued liabilities(9,864)(6,657)
Unearned revenue(9,331)(12,564)
Other operating assets and liabilities, net11,976 35 
Net cash (used in) provided by operating activities(22,401)41,617 
Cash flows from investing activities:
Purchases of property, equipment, and intangible assets(14,870)(33,078)
Proceeds from sales of real estate and property, plant, and equipment and other investing activities739 178 
Net cash used in investing activities(14,131)(32,900)
Cash flows from financing activities:
Borrowings of long-term debt168,000 211,500 
Payments of long-term debt and finance leases(159,004)(216,918)
Purchase of treasury stock(1,635)(2,434)
Debt issuance costs(2,952) 
Proceeds from issuance of common stock, net of stock issuance costs28,945  
Proceeds from exercise of stock options and employee stock purchase plan666 696 
Net cash provided by (used in) financing activities34,020 (7,156)
Effect of exchange rate changes on cash(166)81 
Net change in cash and cash equivalents(2,678)1,642 
Cash and cash equivalents, beginning of period30,045 18,569 
Cash and cash equivalents, end of period$27,367 $20,211 
Supplemental disclosure of cash flow information
Income taxes (refund received) paid$(2,391)$3,140 
Interest paid, net of amounts capitalized7,514 7,799 
Change in construction related payables$462 $3,902 
See Notes to Condensed Consolidated Financial Statements.
5

Table of Contents
RED ROBIN GOURMET BURGERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation and Recent Accounting Pronouncements
Red Robin Gourmet Burgers, Inc., a Delaware corporation, together with its subsidiaries ("Red Robin" or the "Company"), primarily operates, franchises, and develops full-service restaurants in North America. As of October 4, 2020, the Company owned and operated 444 restaurants located in 38 states. The Company also had 103 franchised full-service restaurants in 16 states and one Canadian province. The Company operates its business as one operating and one reportable segment.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Red Robin and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for any interim period are not necessarily indicative of results for the full year.
The accompanying condensed consolidated financial statements of Red Robin have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in the Company's annual consolidated financial statements on Form 10-K have been condensed or omitted. The condensed consolidated balance sheet as of December 29, 2019 has been derived from the audited consolidated financial statements as of that date, but does not include all disclosures required for audited annual financial statements. For further information, please refer to and read these interim condensed consolidated financial statements in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019, filed with the SEC on February 25, 2020.
Our current and prior year periods, period end dates, and number of weeks included in the period are summarized in the table below:
PeriodsPeriod End DateNumber of Weeks in Period
Current and Prior Fiscal Quarters:
Third Quarter 2020October 4, 202012
Third Quarter 2019October 6, 201912
Second Quarter 2020July 12, 202012
Second Quarter 2019July 14, 201912
First Quarter 2020April 19, 202016
First Quarter 2019April 21, 201916
Current and Prior Fiscal Years:
Fiscal Year 2020December 27, 202052
Fiscal Year 2019December 29, 201952
Reclassifications
Certain amounts presented in prior periods have been reclassified to conform with the current period presentation. As of December 29, 2019, the Company reclassified $5.3 million from Prepaid expenses and other current assets to Income tax receivable on the condensed consolidated balance sheets. For the forty weeks ended October 6, 2019, the Company reclassified the following within net cash (used in) provided by operating activities on the condensed consolidated statements of cash flows: $14.1 million from Non-cash other charges to Goodwill and restaurant asset impairment, $0.9 million from Prepaid expenses and other current assets to Income tax receivable, and $0.3 million from Other operating assets and liabilities, net to Lease assets, net of liabilities.
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Recent Accounting Pronouncements
Income Taxes
In December 2019, the Financial Accounting Standards Board ("FASB") issued Update 2019-12, Income Taxes ("Topic 740") as part of its Simplification Initiative. This guidance provides amendments to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for annual and interim reporting periods beginning after December 15, 2020, and early adoption is permitted. We are currently evaluating the full impact this guidance will have on our consolidated financial statements.
We reviewed all other recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a significant impact on the Company's condensed consolidated financial statements.
2. COVID-19 Pandemic
Overview
Due to the novel coronavirus ("COVID-19") pandemic, we continue to navigate an unprecedented time for our business and industry. During the third quarter 2020, the Company continued to expand outdoor seating capacity at reopened Company-owned restaurants in accordance with local limits. Reopening dining rooms and expanding seating capacity was executed with the health, safety, and well-being of Red Robin's Team Members, Guests, and communities in mind, and strict adherence to US Centers for Disease Control and Prevention, state, and local guidelines as our top priority. The COVID-19 pandemic has had a material adverse effect on our business, and we expect the impact from COVID-19 will continue to negatively affect our business.
Franchise Revenue
In response to COVID-19's effect on our franchise operations, we temporarily abated franchise royalty payments and advertising contributions effective March 20, 2020. During periods of abated payments, franchise revenue was not recognized or collected from our franchisees. Abated royalty payments and advertising contributions will not be collected by the Company. The Company began charging and collecting partial franchise royalty payments and advertising contributions during the latter half of the second fiscal quarter of 2020, which continued throughout the Company's third fiscal quarter. As of the end of the third quarter of 2020, the Company had resumed charging full royalty and advertising contributions to our franchisees. Franchised restaurants operate under contractual arrangements with the Company, and the payments specified in the franchise contracts are accounted for under ASC Topic 606, Revenue from Contracts with Customers.
Rent
In response to the impact of COVID-19 on our operations, beginning April 1, 2020 the Company stopped making full lease payments under its existing lease agreements. During the suspension of payments, the Company continued to recognize expenses and liabilities for lease obligations and corresponding right-of-use assets on the balance sheet in accordance with ASC Topic 842.
We are engaging in ongoing constructive discussions with landlords regarding the potential restructuring of lease payments and rent concessions. As of October 4, 2020, the Company has contractually negotiated rent concessions with many of its landlords, with negotiations complete on approximately 50% of its leases. The types of rent concessions the Company has negotiated include early termination, early renewal, rent deferral, and rent abatement.
For contractual rent concessions that do not substantially change the total cash flows of the lease, the Company has elected to account for these concessions assuming the existing lease agreements provide enforceable rights and obligations consistent with the relief issued by the Financial Accounting Standards Board titled ASC Topic 842 and ASC Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic ("FASB Relief"). For leases where the rent concession did not substantially change the total cash flows, the concession was accounted for as a remeasurement to the lease liability based on the original discount rate with a corresponding adjustment to the right-of-use asset. Additionally, the classification of the leases was not reassessed. The Company recorded a $2.2 million remeasurement to increase the lease liability and right-of-use asset resulting from contractual rent concessions under the FASB relief during the third fiscal quarter of 2020.
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For contractual rent concessions that substantially changed the total cash flows of the lease and did not qualify for the FASB relief, we applied the modification framework in accordance with ASC Topic 842, Leases. The Company reassessed lease classification for rent concessions that did not qualify for the FASB relief. During the third fiscal quarter of 2020, it was concluded no leases changed classification between operating and finance. Based on updated discount rates, a $10.1 million remeasurement was recorded to increase the lease liability and a $9.9 million adjustment, net of broker's fees, was recorded to increase the right-of-use asset during the third fiscal quarter of 2020. Contractual rent concessions granted to the Company during the third fiscal quarter of 2020 did not grant the right to use additional assets not included in the original lease contracts, so no separate contracts were accounted for as part of the rent concession modifications.
Restaurant Assets
During the twelve weeks ended October 4, 2020, the Company recognized $3.3 million of impairment related to assets at two permanently closed Company-owned restaurants. These impairment charges were included in Restaurant closure and refranchising costs in Other charges (gains) on the condensed consolidated statements of operation and comprehensive loss.
Income Tax
The March 19, 2020 passage of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") created an opportunity for the Company to carry back 2019 and 2020 net operating losses ("NOL's"). Upon filing of its 2019 federal tax return during the third quarter of 2020 and gaining further interpretations and expert technical guidance surrounding the application of the CARES Act, the Company recorded an additional $42.8 million in federal income tax receivables to Income tax receivable on the condensed consolidated balance sheets and recorded a related income tax benefit to the condensed consolidated statements of operation and comprehensive loss. After consideration for the adjustments of carrybacks due to the CARES Act, we have a combined federal and state valuation allowance of $67.1 million, which was recorded to Other assets, net on the condensed consolidated balance sheets. Subsequent to our third quarter balance sheet date, the Company received $49.4 million in cash tax refunds, including interest, and currently expects to receive between $12 million to $15 million of additional cash tax refunds within the next 12 months. A portion of this refund was used to make a $42 million repayment on the Company's credit facility on October 30, 2020.
As of October 4, 2020, the Company had $9.7 million of net operating loss carryforwards for state income tax purposes that arose from the 2019 and 2020 tax years. The Company reclassified this amount from state tax current receivable which was recorded in Prepaid expenses and other current assets as of our second fiscal quarter of 2020, to state deferred tax asset which is recorded to Other Assets, net on the condensed consolidated balance sheets as a result of the CARES Act legislation and in conjunction with the filing of our state tax returns during our third fiscal quarter. Of these state net operating loss carryforwards, approximately $0.2 million may expire, if unused, in 2024. The remaining state net operating losses approximating $9.5 million may expire, if unused, through 2039 or in some cases will be retained for an indefinite period. The utilization of net operating loss carryforwards may be limited to 80% of taxable income in any given year. As states' CARES legislation continues to evolve these estimates may change. The total $67.1 million valuation allowance includes the $9.7 million state NOL's recorded as of October 4, 2020.
3. Revenue
Disaggregation of revenue
In the following table, revenue is disaggregated by type of good or service (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 4, 2020October 6, 2019October 4, 2020October 6, 2019
Restaurant revenue$197,009 $289,862 $658,587 $992,764 
Franchise revenue(1)
2,584 3,727 5,861 13,479 
Gift card breakage523 580 2,329 4,899 
Other revenue362 53 888 927 
Total revenues$200,478 $294,222 $667,665 $1,012,069 
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(1) The decrease in Franchise revenue is driven by the temporary abatement and non-collection of franchise payments. See Note 2, COVID-19 Pandemic, for further discussion.


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Contract liabilities
Components of Unearned revenue in the accompanying condensed consolidated balance sheets are as follows (in thousands):
October 4, 2020December 29, 2019
Unearned gift card revenue$31,514 $43,544 
Deferred loyalty revenue$11,050 $10,679 
Revenue recognized in the condensed consolidated statements of operations and comprehensive loss for the redemption of gift cards that were included in the liability balance at the beginning of the fiscal year was as follows (in thousands):
Forty Weeks Ended
October 4, 2020October 6, 2019
Gift card revenue$16,191 $19,400 

4. Leases
Leases are included in right-of-use assets, net, current portion of lease obligations, and long-term portion of lease liabilities on our condensed consolidated balance sheet as of October 4, 2020 and December 29, 2019 as follows (in thousands):
October 4, 2020FinanceOperatingTotal
Right of use assets, net$11,463 $404,485 $415,948 
Current portion of lease obligations1,122 60,910 62,032 
Long-term portion of lease obligations12,666 438,085 450,751 
Total$13,788 $498,995 $512,783 
December 29, 2019FinanceOperatingTotal
Right of use assets, net$7,552 $418,696 $426,248 
Current portion of lease obligations725 41,974 42,699 
Long-term portion of lease obligations8,822 456,613 465,435 
Total$9,547 $498,587 $508,134 
The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in Occupancy on our condensed consolidated statement of operations as follows (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 4, 2020October 6, 2019October 4, 2020October 6, 2019
Operating lease cost$14,992 $17,298 $51,931 $58,412 
Finance lease cost:
Amortization of right of use assets227 193615 634
Interest on lease liabilities150 122412 416
Total finance lease cost$377 $315 $1,027 $1,050 
Variable lease cost5,902 6,653 19,207 22,185 
Total$21,271 $24,266 $72,165 $81,647 
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Maturities of our lease liabilities as of October 4, 2020 were as follows (in thousands):
Finance Leases Operating LeasesTotal
Remainder of 2020$548 $29,370 $29,918 
20211,450 76,091 77,541 
20221,570 73,899 75,469 
20231,449 71,855 73,304 
20241,469 69,883 71,352 
Thereafter11,686 396,286 407,972 
Total future lease liability$18,172 $717,384 $735,556 
Less imputed interest4,384 218,389 222,773 
Fair value of lease liability$13,788 $498,995 $512,783 
Supplemental cash flow information related to leases is as follows (in thousands, except other information):
Forty Weeks Ended
October 4, 2020October 6, 2019
Cash flows from operating activities
Cash paid related to lease liabilities
Operating leases$33,034 $58,930 
Finance leases412 383 
Cash flows from financing activities
Cash paid related to lease liabilities
Finance leases196 686 
Cash paid for amounts included in the measurement of lease liabilities:$33,642 $59,999 
Right of use assets obtained in exchange for operating lease obligations$31,731 $10,396 
Right of use assets obtained in exchange for finance lease obligations$4,581 $1,669 
Other information related to operating leases as follows:
Weighted average remaining lease term10.33 years10.84 years
Weighted average discount rate7.12 %7.33 %
Other information related to finance leases as follows:
Weighted average remaining lease term11.93 years11.63 years
Weighted average discount rate4.93 %4.71 %

5. Goodwill and Intangible Assets
The following table presents goodwill as of October 4, 2020 and December 29, 2019 (in thousands):
Balance, December 29, 2019$96,397 
Foreign currency translation adjustment(983)
Goodwill impairment(1)
(95,414)
Balance, October 4, 2020$ 
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(1) See Note 2, COVID-19 Pandemic, for further discussion of goodwill impairment recognized during the forty weeks ended October 4, 2020.
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The following table presents intangible assets as of October 4, 2020 and December 29, 2019 (in thousands):
October 4, 2020December 29, 2019
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Intangible assets subject to amortization:
Franchise rights$50,584 $(36,813)$13,771 $53,336 $(35,896)$17,440 
Leasehold interests13,001 (9,155)3,846 13,001 (8,794)4,207 
Liquor licenses and other9,961 (9,598)363 10,737 (9,869)868 
$73,546 $(55,566)$17,980 $77,074 $(54,559)$22,515 
Indefinite-lived intangible assets:
Liquor licenses and other$7,460 $— $7,460 $7,460 $— $7,460 
Intangible assets, net$81,006 $(55,566)$25,440 $84,534 $(54,559)$29,975 

6. Loss Per Share
Basic loss per share amounts are calculated by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share amounts are calculated based upon the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. Potentially dilutive shares are excluded from the computation in periods in which they have an anti-dilutive effect. Diluted loss per share reflects the potential dilution that could occur if holders of options exercised their options into common stock.
The Company uses the treasury stock method to calculate the effect of outstanding stock options. Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 4, 2020October 6, 2019October 4, 2020October 6, 2019
Basic weighted average shares outstanding15,540 12,959 13,945 12,967 
Dilutive effect of stock options and awards    
Diluted weighted average shares outstanding15,540 12,959 13,945 12,967 
Awards excluded due to anti-dilutive effect on diluted loss per share895 358 480 405 

7. Other Charges (Gains)
Other charges (gains) consist of the following (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 4, 2020October 6, 2019October 4, 2020October 6, 2019
Goodwill impairment$ $ $95,414 $ 
Restaurant asset impairment  20,779 14,064 
Restaurant closure and refranchising costs (gains)3,982 (3,922)12,990 (2,617)
Litigation contingencies  4,500  
Board and stockholder matter costs4 1,311 2,453 2,463 
COVID-19 related costs430  1,279  
Severance and executive transition 594 881 2,958 
Executive retention 260  620 
Other charges (gains)$4,416 $(1,757)$138,296 $17,488 
We performed a goodwill impairment analysis during the first quarter of 2020 resulting in full impairment of our goodwill balance. The goodwill impairment was measured as the amount by which the carrying amount of the reporting unit, including goodwill, exceeded its fair value.
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The Company recognized non-cash impairment charges related to restaurant assets at 30 and 29 Company-owned restaurants during the forty weeks ended October 4, 2020 and October 6, 2019 resulting from quantitative impairment analyses. Additionally, the Company recognized non-cash impairment charges of $