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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 3, 2021

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 8, 2021, there were 15,716,181 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

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PART I — FINANCIAL INFORMATION
ITEM 1.    Financial Statements (unaudited)
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except for per share amounts)October 3, 2021December 27, 2020
Assets:
Current assets:
Cash and cash equivalents$17,757 $16,116 
Accounts receivable, net11,939 16,510 
Inventories23,769 23,802 
Income tax receivable16,165 16,662 
Prepaid expenses and other current assets12,439 13,818 
Total current assets82,069 86,908 
Property and equipment, net388,881 427,033 
Right of use assets, net419,788 425,573 
Intangible assets, net22,419 24,714 
Other assets, net8,567 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 liabilities32,555 27,653 
Unearned revenue42,621 50,138 
Current portion of lease obligations49,894 55,275 
Current portion of long-term debt9,692 9,692 
Accrued liabilities and other42,240 39,617 
Total current liabilities211,640 202,554 
Long-term debt147,471 160,952 
Long-term portion of lease obligations450,673 465,233 
Other non-current liabilities15,775 25,287 
Total liabilities$825,559 $854,026 
Commitments and contingencies (see note 8)
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 capital240,445 243,407 
Accumulated other comprehensive income (loss), net of tax10 (4)
Retained earnings48,509 77,198 
Total stockholders' equity96,165 120,713 
Total liabilities and stockholders' equity
$921,724 $974,739 
See Notes to Condensed Consolidated Financial Statements.
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RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
Twelve Weeks EndedForty Weeks Ended
(in thousands, except for per share amounts)October 3, 2021October 4, 2020October 3, 2021October 4, 2020
Revenues:
Restaurant revenue$270,202 $197,009 $861,036 $658,587 
Franchise and other revenues5,242 3,469 17,658 9,078 
Total revenues275,444 200,478 878,694 667,665 
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Cost of sales62,671 46,037 193,754 155,243 
Labor99,725 74,344 310,333 255,652 
Other operating51,462 37,631 156,102 124,585 
Occupancy22,519 22,099 74,233 76,514 
Depreciation and amortization18,881 19,173 63,984 68,053 
General and administrative expenses17,691 15,190 57,664 56,054 
Selling expenses12,652 6,094 31,635 26,429 
Pre-opening costs418 89 792 245 
Other charges1,561 4,416 9,228 138,296 
Total costs and expenses287,580 225,073 897,725 901,071 
Loss from operations(12,136)(24,595)(19,031)(233,406)
Other expense:
Interest expense, net and other2,870 2,280 9,986 7,629 
Loss before income taxes(15,006)(26,875)(29,017)(241,035)
Income tax benefit(26)(20,696)(328)(4,297)
Net loss$(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)$(16.98)
Weighted average shares outstanding:
Basic15,709 15,540 15,647 13,945 
Diluted15,709 15,540 15,647 13,945 
Other comprehensive (loss) income:
Foreign currency translation adjustment$(6)$9 $14 $(1,121)
Other comprehensive (loss) income, net of tax(6)9 14 (1,121)
Total comprehensive loss$(14,986)$(6,170)$(28,675)$(237,859)
See Notes to Condensed Consolidated Financial Statements.
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RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Common StockTreasury StockAccumulated
Other
Comprehensive
(Loss) Income,
net of tax
Paid-in
Capital
Retained
Earnings
(in thousands)SharesAmountSharesAmountTotal
Balance, December 27, 202020,449 $20 4,901 $(199,908)$243,407 $(4)$77,198 $120,713 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (74)3,025 (3,640)— — (615)
Non-cash stock compensation— — — — 880 — — 880 
Net loss— — — — — — (8,713)(8,713)
Other comprehensive income— — — — — 21 — 21 
Balance, April 18, 202120,449 $20 4,827 $(196,883)$240,647 $17 $68,485 $112,286 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (95)3,844 (3,547)— — 297 
Non-cash stock compensation— — — — 1,577 — — 1,577 
Net loss— — — — — — (4,996)(4,996)
Other comprehensive (loss)— — — — — (1)— (1)
Balance, July 11, 202120,449 $20 4,732 $(193,039)$238,677 $16 $63,489 $109,163 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (5)220 (280)— — (60)
Non-cash stock compensation— — — — 2,048 — — 2,048 
Net loss— — — — — — (14,980)(14,980)
Other comprehensive loss— — — — — (6)— (6)
Balance, October 3, 202120,449 $20 4,727 $(192,819)$240,445 $10 $48,509 $96,165 

See Notes to Condensed Consolidated Financial Statements.
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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.
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RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Forty Weeks Ended
(in thousands)October 3, 2021October 4, 2020
Cash flows from operating activities:
Net loss$(28,689)$(236,738)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization63,984 68,053 
Gift card breakage(3,231)(2,329)
Goodwill and asset impairment1,357 116,193 
Non-cash other charges319 (2,438)
Deferred income tax provision 52,439 
Stock-based compensation expense4,501 3,082 
Other, net2,228 639 
Changes in operating assets and liabilities:
Accounts receivable4,544 13,250 
Income tax receivable520 (57,756)
Prepaid expenses and other current assets1,014 11,229 
Lease assets, net of liabilities(12,628)19,194 
Trade accounts payable and accrued liabilities16,948 (9,864)
Unearned revenue(4,286)(9,331)
Other operating assets and liabilities, net(8,964)11,976 
Net cash provided by (used in) operating activities37,617 (22,401)
Cash flows from investing activities:
Purchases of property and equipment(19,987)(14,870)
Proceeds from sales of real estate and property, plant, and equipment and other investing activities20 739 
Net cash used in investing activities(19,967)(14,131)
Cash flows from financing activities:
Borrowings of long-term debt109,500 168,000 
Payments of long-term debt and finance leases(125,216)(159,004)
Purchase of treasury stock (1,635)
Debt issuance costs(870)(2,952)
Proceeds from issuance of common stock, net of stock issuance costs 28,945 
Proceeds from exercise of stock options and employee stock purchase plan549 666 
Net cash (used in) provided by financing activities(16,037)34,020 
Effect of exchange rate changes on cash28 (166)
Net change in cash and cash equivalents1,641 (2,678)
Cash and cash equivalents, beginning of period16,116 30,045 
Cash and cash equivalents, end of period$17,757 $27,367 
Supplemental disclosure of cash flow information
Income tax refunds received, net$(840)$(2,391)
Interest paid, net of amounts capitalized$7,586 $7,514 
See Notes to Condensed Consolidated Financial Statements.
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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 3, 2021, the Company owned and operated 430 restaurants located in 38 states. The Company also had 101 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 27, 2020 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 27, 2020 filed with the SEC on March 3, 2021.
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:
First Quarter 2021April 18, 202116
First Quarter 2020April 19, 202016
Second Quarter 2021July 11, 202112
Second Quarter 2020July 12, 202012
Third Quarter 2021October 3, 202112
Third Quarter 2020October 4, 202012
Current and Prior Fiscal Years:
Fiscal Year 2021December 26, 202152
Fiscal Year 2020December 27, 202052
Reclassifications
Certain amounts presented have been reclassified within the October 4, 2020 Condensed Consolidated Statement of Cash Flows to conform with the current period presentation, including prior year reclassifications within Changes in operating assets and liabilities. The reclassifications had no effect on the Company’s cash flows from operations.
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Table of Contents
Certain amounts presented have been reclassified within the October 4, 2020 Condensed Consolidated Statements Of Operations And Comprehensive Loss to present General and administrative expenses and Selling expenses separately for improved comparability and alignment with industry presentation. The reclassifications had no effect on the Company’s Total costs and expenses, Loss from operations, or Net loss.
Recent Accounting Pronouncements
Reference Rate Reform
In March 2020, FASB issued Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This update provides temporary optional expedients to applying the reference rate reform guidance to contracts that reference LIBOR or another reference rate expected to be discontinued. Under this update, contract modifications resulting in a new reference rate may be accounted for as a continuation of the existing contract. This guidance is effective upon issuance of the update and applies to contract modifications made through December 31, 2022. 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. 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 3, 2021October 4, 2020October 3, 2021October 4, 2020
Restaurant revenue$270,202 $197,009 $861,036 $658,587 
Franchise revenue4,303 2,584 13,123 5,861 
Gift card breakage438 523 3,231 2,329 
Other revenue501 362 1,304 888 
Total revenues$275,444 $200,478 $878,694 $667,665 
———————————————————

Contract liabilities
Components of Unearned revenue in the accompanying Condensed Consolidated Balance Sheets are as follows (in thousands):
October 3, 2021December 27, 2020
Unearned gift card revenue$29,599 $38,309 
Deferred loyalty revenue$13,022 $11,829 
Revenue recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the redemption and breakage 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 3, 2021October 4, 2020
Gift card revenue$14,448 $16,191 
3. 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 3, 2021 and December 27, 2020 as follows (in thousands):
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October 3, 2021FinanceOperatingTotal
Right of use assets, net$9,774 $410,014 $419,788 
Current portion of lease obligations1,140 48,754 49,894 
Long-term portion of lease obligations10,813 439,860 450,673 
Total$11,953 $488,614 $500,567 
December 27, 2020FinanceOperatingTotal
Right of use assets, net$9,644 $415,929 $425,573 
Current portion of lease obligations1,078 54,197 55,275 
Long-term portion of lease obligations10,937 454,296 465,233 
Total$12,015 $508,493 $520,508 
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 and Comprehensive Loss as follows (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 3, 2021October 4, 2020October 3, 2021October 4, 2020
Operating lease cost$16,061 $14,992 $53,765 $51,931 
Finance lease cost:
Amortization of right of use assets197 227657 615
Interest on lease liabilities131 150407 412
Total finance lease cost328 $377 $1,064 $1,027 
Variable lease cost4,496 5,902 15,271 19,207 
Total$20,885 $21,271 $70,100 $72,165 
Maturities of our lease liabilities as of October 3, 2021 were as follows (in thousands):
Finance Leases Operating LeasesTotal
Remainder of 2021$550 $14,740 $15,290 
20221,327 79,038 80,365 
20231,244 76,303 77,547 
20241,264 74,575 75,839 
20251,283 69,959 71,242 
Thereafter9,441 377,685 387,126 
Total future lease liability$15,109 $692,300 $707,409 
Less imputed interest3,156 203,686 206,842 
Carrying value of lease liability$11,953 $488,614 $500,567 
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Supplemental cash flow and other information related to leases is as follows (in thousands, except other information):
Forty Weeks Ended
October 3, 2021October 4, 2020
Cash flows from operating activities
Cash paid related to lease liabilities
Operating leases$68,036 $33,034 
Finance leases406 412 
Cash flows from financing activities
Cash paid related to lease liabilities
Finance leases1,447 196 
Cash paid for amounts included in the measurement of lease liabilities:$69,889 $33,642 
Right of use assets obtained in exchange for operating lease obligations$27,483 $31,731 
Right of use assets obtained in exchange for finance lease obligations$988 $4,581 
Other information related to operating leases as follows:
Weighted average remaining lease term9.9 years10.3 years
Weighted average discount rate7.01 %7.12 %
Other information related to finance leases as follows:
Weighted average remaining lease term11.0 years11.9 years
Weighted average discount rate4.56 %4.93 %

4. 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. As the Company was in a net loss position for both the twelve week and forty week periods ended October 3, 2021 and October 4, 2020, all potentially dilutive common shares are considered anti-dilutive.
The Company uses the treasury stock method to calculate the effect of outstanding stock options and awards. Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 3, 2021October 4, 2020October 3, 2021October 4, 2020
Basic weighted average shares outstanding15,709 15,540 15,647 13,945 
Dilutive effect of stock options and awards    
Diluted weighted average shares outstanding15,709 15,540 15,647 13,945 
Awards excluded due to anti-dilutive effect on diluted loss per share545 895 390 480 

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5. Other Charges
Other charges consist of the following (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 3, 2021October 4, 2020October 3, 2021October 4, 2020
Restaurant closure costs$1,102 $3,982 $5,301 $12,990 
Asset impairment  1,357 20,779 
Litigation contingencies160  1,330 4,500 
COVID-19 related costs299 430 1,112 1,279 
Board and stockholder matter costs 4 128 2,453 
Goodwill impairment   95,414 
Severance and executive transition   881 
Other charges$1,561 $4,416 $9,228 $138,296 
Restaurant closure costs represent costs incurred for permanently closed restaurants, including lease termination costs, as well as the ongoing restaurant operating costs of Company-owned restaurants that remained temporarily closed due to the COVID-19 pandemic.
During the forty weeks ended October 3, 2021, Asset impairment primarily related to the impairment of long-lived assets at one Company-owned restaurant with a carrying value of $3.8 million (including right of use assets), recognizing an impairment expense of $1.2 million related to the net book value of long-lived restaurant assets for this restaurant. During the twelve and forty weeks ended October 4, 2020 the Company recognized non-cash impairment charges related to restaurant assets at two and thirty-six Company-owned restaurants, respectively, resulting from quantitative impairment analyses.
Litigation contingencies include legal settlement costs accrued within the period presented related to class action employment cases and other employment matters.
COVID-19 related costs include the costs of purchasing personal protective equipment for restaurant Team Members and Guests and emergency sick pay provided to restaurant Team Members during the pandemic.
Board and stockholder matters costs were primarily related to the recruitment and appointment of new board members, and other board and stockholder matters.
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.
Severance and executive transition in 2020 primarily relates to severance costs associated with the reduction in force of restaurant support center Team Members in April 2020.
6. Borrowings
Borrowings as of October 3, 2021 and December 27, 2020 are summarized below (in thousands):
October 3, 2021December 27, 2020
BorrowingsWeighted
Average
Interest Rate
BorrowingsWeighted
Average
Interest Rate
Revolving credit facility, term loan, and other long-term debt$157,163 6.80 %$170,644 4.50 %
Total debt157,163 170,644 
Less current portion9,692 9,692 
Long-term debt$147,471 $160,952 
Amounts issued under letters of credit$8,600 $8,700 

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Loan origination costs associated with the Company's Amended and Restated Credit Agreement (the "Credit Facility") are included as deferred costs in Other assets, net in the accompanying Condensed Consolidated Balance Sheets. Unamortized debt issuance costs were $2.0 million and $3.3 million as of October 3, 2021 and December 27, 2020.

Third Amendment to Credit Agreement
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 (the "Third Amendment") to obtain additional flexibility to continue to implement our business strategy. The Company anticipates refinancing its Credit Facility in 2022. The Third Amendment further amends the Company’s Amended and Restated Credit Agreement (as amended, the "Credit Facility") to, among other things:
waive the application of the lease adjusted leverage ratio financial covenant (the "Leverage Ratio Covenant") for the third fiscal quarter of 2021
increase the maximum leverage permitted for purposes of the Leverage Ratio Covenant for the fourth fiscal quarter of 2021 and the first, second and third fiscal quarters of 2022, with the definition of the Leverage Ratio Covenant also being amended to provide that it shall not be calculated on a basis that gives effect to a seasonally adjusted annualized consolidated EBITDA in future periods;
decrease the minimum fixed charge coverage ratio required for purposes of the fixed charge coverage ratio financial covenant (the “FCCR Covenant”) for the first fiscal quarter of 2022, with the definition of the FCCR Covenant also being amended to account for cash tax refunds received in any future period and certain capital expenditures constituting "Expansion Capital Expenditures" being excluded from the calculation thereof;
decrease the minimum liquidity required for purposes of the minimum liquidity covenant and provide for the testing of such minimum liquidity covenant at all times;
make certain amendments to the Credit Facility to (i) provide that certain additional capital expenditures shall constitute "Expansion Capital Expenditures" and (ii) provide that "Expansion Capital Expenditures" shall be permitted for all periods on or prior to the last day of the fiscal quarter of the Company ending on or about October 2, 2022, so long as (1) there is no default or event of default, (2) on a pro forma basis, Liquidity shall exceed a certain amount and (3) such "Expansion Capital Expenditures" do not exceed certain agreed amounts in each fiscal quarter (with carryforward of unused amounts to the immediately succeeding fiscal quarter), and, for all periods thereafter, so long as (1) there is no default or event of default, (2) on a pro forma basis, Liquidity shall exceed a certain amount and (3) on a pro forma basis, lease adjusted leverage ratio shall not exceed 5.00x;
increase the pricing under the Credit Facility for (a) the period from the Third Amendment Effective Date through the first interest determination date occurring after the last day of the fiscal quarter of the Company ending on or about April 17, 2022 to LIBOR (subject to a 1.00% floor) plus 6.00% and (b) periods thereafter to LIBOR (to which a 1.00% LIBOR floor shall apply) plus 6.50%;
provide that the previously agreed utilization fee of 0.75% per annum of the daily outstanding principal amount of term loans, revolving loans, swingline loans and letter of credit obligations under the Credit Facility shall be owing solely in respect of the period commencing on February 25, 2021 and ending on the Third Amendment Effective Date, with all such amounts payable on the Third Amendment Effective Date;
reduce the aggregate revolving commitment to $75,000,000 on the last day of the fiscal quarter of the Company ending on or about April 17, 2022;
amend the anti-cash hoarding provision to require revolver repayments (but with no associated permanent reduction in the revolving commitment) to the extent that the Company’s consolidated cash on hand exceeds $30,000,000 at any time;
revise the requirement that the annual audited financial statements be delivered without a "going concern qualification" to permit such a qualification solely relating to (i) any impending debt maturity (whether under the Credit Facility or otherwise) or (ii) any actual or prospective inability to satisfy a financial maintenance covenant; and
make certain amendments to the Credit Facility to address LIBOR transition matters.

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The description above is a summary of the Third Amendment and is qualified in its entirety by the complete text of the agreement, which is incorporated herein by reference. In conjunction with the Third Amendment, the Company paid certain customary amendment fees to the lenders under the Credit Facility totaling approximately $0.8 million, which will be capitalized as deferred loan fees and amortized over the remaining term of the Credit Facility.
7. Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The carrying amounts of the Company's cash and cash equivalents, accounts receivable, accounts payable, and current accrued expenses and other liabilities approximate fair value due to the short term nature or maturity of the instruments.
The following tables present the Company's assets measured at fair value on a recurring basis included in Other assets, net on the accompanying Condensed Consolidated Balance Sheets as of October 3, 2021 and December 27, 2020 (in thousands):
October 3, 2021Level 1Level 2Level 3
Assets:    
Investments in rabbi trust$5,999 $5,999 $ $ 
Total assets measured at fair value$5,999 $5,999 $ $ 
December 27, 2020Level 1Level 2Level 3
Assets:
Investments in rabbi trust$6,740 $6,740 $ $ 
Total assets measured at fair value$6,740 $6,740 $ $ 
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities recognized or disclosed at fair value on the Condensed Consolidated Financial Statements on a nonrecurring basis include items such as property, plant and equipment, right of use assets, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired.
The Company has measured non-financial assets for impairment using continuing and projected future cash flows, which were based on significant inputs not observable in the market and thus represented a level 3 fair value measurement. See footnote 5 Other Charges of this Quarterly Report on Form 10-Q for additional detail.
Disclosures of Fair Value of Other Assets and Liabilities
The Company's liability under its Credit Facility is carried at historical cost in the accompanying Condensed Consolidated Balance Sheets. As of October 3, 2021, the carrying value of the liability under the Company's Credit Facility approximated fair value. As of December 27, 2020, the carrying value and fair value of the Credit Facility were $169.8 million and $172.6 million. The interest rate on the Credit Facility represents a level 2 fair value input.
8. Commitments and Contingencies
In the normal course of business, there are various claims in process, matters in litigation, and other contingencies. These include employment related claims and claims from Guests or Team Members alleging illness, injury, food quality, health, or operational concerns. While it is not possible to predict the outcome of these suits, legal proceedings, and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these matters has been made in the financial statements and that the ultimate resolution of these matters will not have a material adverse effect on our financial position and results of operations.
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ITEM 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations provides a narrative of our financial performance and condition that should be read in conjunction with the accompanying Condensed Consolidated Financial Statements. All comparisons under this heading between 2021 and 2020 refer to the twelve and forty weeks ended October 3, 2021 and October 4, 2020, unless otherwise indicated.
Overview
Description of Business
Red Robin Gourmet Burgers, Inc., a Delaware corporation, together with its subsidiaries ("Red Robin," "we," "us," "our," or the "Company"), primarily operates, franchises, and develops full-service restaurants with 531 locations in North America. As of October 3, 2021, the Company owned 430 restaurants located in 38 states. The Company also had 101 franchised full-service restaurants in 16 states and one Canadian province. The Company operates its business as one operating and one reportable segment.
COVID-19 Impact
The COVID-19 pandemic continues to create unprecedented challenges for our industry including government mandated restrictions, changing consumer behavior, labor and supply chain challenges, and wide spread inflationary costs. Even as government restrictions were lifted, and dining rooms returned to full capacity, the surge in the Delta variant continued to highlight the critical importance of providing a safe environment for our Team Members and Guests.
In response to these COVID-19 challenges, the Company limited dining hours and seating capacity in order to preserve the consistent quality experience our Guests expect from us. Our disciplined Guest focus is delivered through our Total Guest Experience hospitality model ("TGX"), off-premises enhancements, and our management labor model.
Our ability to attract and retain Team Members has become more challenging in the current competitive job market. Staffing is our number one priority; we have supported our staffing efforts through technology enhancements to the application and hiring process, improving our wage policies, holding national hiring days, and deploying internal and external resources to augment recruiting, hiring, and training efforts. The challenges in hiring and retention and global supply chain disruptions have affected many of our vendor partners, resulting in intermittent product and distribution shortages.
We remain focused on proactively addressing these industry challenges, while delivering a great Guest experience and continuing to prioritize the satisfaction and retention of our Team Members.
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Financial and Operational Highlights
The following summarizes the operational and financial highlights during the twelve weeks ended October 3, 2021:
Restaurant Revenue, compared to the same period in the prior year, is presented in the table below:
(millions)
Restaurant Revenue for the twelve weeks ended October 4, 2020
$197.0 
Increase in comparable restaurant revenue67.0 
Increase from non-comparable restaurants6.2 
Total increase73.2 
Restaurant Revenue for the twelve weeks ended October 3, 2021
$270.2 
The following summarizes the operational and financial highlights during the forty weeks ended October 3, 2021:
Restaurant Revenue, compared to the same period in the prior year, is presented in the table below:
(millions)
Restaurant Revenue for the forty weeks ended October 4, 2020
$658.6 
Increase in comparable restaurant revenue200.6 
Decrease from non-comparable restaurants1.8 
Total increase202.4 
Restaurant Revenue for the forty weeks ended October 3, 2021
$861.0 
Restaurant revenues and operating costs as a percentage of restaurant revenue for the period are detailed in the table below:
Twelve weeks ended2021 compared to 2020Twelve Weeks Ended
2021 compared to 2019(1)
October 3, 2021October 4, 2020Increase/(Decrease)
October 6, 2019(1)
Increase/(Decrease)
Restaurant revenue (millions)$270.2 $197.0 37.2 %$289.9 (6.8)%
Restaurant operating costs:(Percentage of Restaurant Revenue)(Basis Points)(Percentage of Restaurant Revenue)(Basis Points)
Cost of sales23.2 %23.4 %(20)23.8 %(60)
Labor36.9 %37.7 %(80)36.2 %70 
Other operating19.0 %19.1 %(10)15.3 %370 
Occupancy8.3 %11.2 %(290)8.6 %(30)
Total87.5 %91.4 %(390)83.9 %360 
(1) Presented for improved comparability to pre-COVID-19 operations.
Forty weeks ended2021 compared to 2020Forty Weeks Ended
2021 compared to 2019(1)
October 3, 2021October 4, 2020Increase/(Decrease)
October 6, 2019(1)
Increase/(Decrease)
Restaurant revenue (millions)$