000117175912/292024Q3FALSExbrli:sharesiso4217:USDiso4217:USDxbrli:sharesrrgb:restaurantrrgb:staterrgb:provincerrgb:segmentxbrli:pure00011717592024-01-012024-10-0600011717592024-11-0400011717592024-10-0600011717592023-12-310001171759us-gaap:FoodAndBeverageMember2024-07-152024-10-060001171759us-gaap:FoodAndBeverageMember2023-07-102023-10-010001171759us-gaap:FoodAndBeverageMember2024-01-012024-10-060001171759us-gaap:FoodAndBeverageMember2022-12-262023-10-010001171759us-gaap:FranchiseMember2024-07-152024-10-060001171759us-gaap:FranchiseMember2023-07-102023-10-010001171759us-gaap:FranchiseMember2024-01-012024-10-060001171759us-gaap:FranchiseMember2022-12-262023-10-010001171759rrgb:ProductAndServiceGiftCardAndOtherMember2024-07-152024-10-060001171759rrgb:ProductAndServiceGiftCardAndOtherMember2023-07-102023-10-010001171759rrgb:ProductAndServiceGiftCardAndOtherMember2024-01-012024-10-060001171759rrgb:ProductAndServiceGiftCardAndOtherMember2022-12-262023-10-0100011717592024-07-152024-10-0600011717592023-07-102023-10-0100011717592022-12-262023-10-010001171759us-gaap:CommonStockMember2023-12-310001171759us-gaap:TreasuryStockCommonMember2023-12-310001171759us-gaap:AdditionalPaidInCapitalMember2023-12-310001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001171759us-gaap:RetainedEarningsMember2023-12-310001171759us-gaap:TreasuryStockCommonMember2024-01-012024-04-210001171759us-gaap:AdditionalPaidInCapitalMember2024-01-012024-04-2100011717592024-01-012024-04-210001171759us-gaap:RetainedEarningsMember2024-01-012024-04-210001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-04-210001171759us-gaap:CommonStockMember2024-04-210001171759us-gaap:TreasuryStockCommonMember2024-04-210001171759us-gaap:AdditionalPaidInCapitalMember2024-04-210001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-210001171759us-gaap:RetainedEarningsMember2024-04-2100011717592024-04-210001171759us-gaap:TreasuryStockCommonMember2024-04-222024-07-140001171759us-gaap:AdditionalPaidInCapitalMember2024-04-222024-07-1400011717592024-04-222024-07-140001171759us-gaap:RetainedEarningsMember2024-04-222024-07-140001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-222024-07-140001171759us-gaap:CommonStockMember2024-07-140001171759us-gaap:TreasuryStockCommonMember2024-07-140001171759us-gaap:AdditionalPaidInCapitalMember2024-07-140001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-140001171759us-gaap:RetainedEarningsMember2024-07-1400011717592024-07-140001171759us-gaap:TreasuryStockCommonMember2024-07-152024-10-060001171759us-gaap:AdditionalPaidInCapitalMember2024-07-152024-10-060001171759us-gaap:RetainedEarningsMember2024-07-152024-10-060001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-152024-10-060001171759us-gaap:CommonStockMember2024-10-060001171759us-gaap:TreasuryStockCommonMember2024-10-060001171759us-gaap:AdditionalPaidInCapitalMember2024-10-060001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-10-060001171759us-gaap:RetainedEarningsMember2024-10-060001171759us-gaap:CommonStockMember2022-12-250001171759us-gaap:TreasuryStockCommonMember2022-12-250001171759us-gaap:AdditionalPaidInCapitalMember2022-12-250001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-250001171759us-gaap:RetainedEarningsMember2022-12-2500011717592022-12-250001171759us-gaap:TreasuryStockCommonMember2022-12-262023-04-160001171759us-gaap:AdditionalPaidInCapitalMember2022-12-262023-04-1600011717592022-12-262023-04-160001171759us-gaap:RetainedEarningsMember2022-12-262023-04-160001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-262023-04-160001171759us-gaap:CommonStockMember2023-04-160001171759us-gaap:TreasuryStockCommonMember2023-04-160001171759us-gaap:AdditionalPaidInCapitalMember2023-04-160001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-160001171759us-gaap:RetainedEarningsMember2023-04-1600011717592023-04-160001171759us-gaap:TreasuryStockCommonMember2023-04-172023-07-090001171759us-gaap:AdditionalPaidInCapitalMember2023-04-172023-07-0900011717592023-04-172023-07-090001171759us-gaap:RetainedEarningsMember2023-04-172023-07-090001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-172023-07-090001171759us-gaap:CommonStockMember2023-07-090001171759us-gaap:TreasuryStockCommonMember2023-07-090001171759us-gaap:AdditionalPaidInCapitalMember2023-07-090001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-090001171759us-gaap:RetainedEarningsMember2023-07-0900011717592023-07-090001171759us-gaap:TreasuryStockCommonMember2023-07-102023-10-010001171759us-gaap:AdditionalPaidInCapitalMember2023-07-102023-10-010001171759us-gaap:RetainedEarningsMember2023-07-102023-10-010001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-102023-10-010001171759us-gaap:CommonStockMember2023-10-010001171759us-gaap:TreasuryStockCommonMember2023-10-010001171759us-gaap:AdditionalPaidInCapitalMember2023-10-010001171759us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-10-010001171759us-gaap:RetainedEarningsMember2023-10-0100011717592023-10-010001171759us-gaap:EntityOperatedUnitsMember2024-10-060001171759us-gaap:FranchisedUnitsMember2024-10-060001171759us-gaap:FranchisedUnitsMember2024-01-012024-10-060001171759srt:MinimumMember2024-01-012024-10-060001171759srt:MaximumMember2024-01-012024-10-060001171759rrgb:ProductsAndServicesGiftCardBreakageMember2024-07-152024-10-060001171759rrgb:ProductsAndServicesGiftCardBreakageMember2023-07-102023-10-010001171759rrgb:ProductsAndServicesGiftCardBreakageMember2024-01-012024-10-060001171759rrgb:ProductsAndServicesGiftCardBreakageMember2022-12-262023-10-010001171759rrgb:ProductsAndServicesOtherMember2024-07-152024-10-060001171759rrgb:ProductsAndServicesOtherMember2023-07-102023-10-010001171759rrgb:ProductsAndServicesOtherMember2024-01-012024-10-060001171759rrgb:ProductsAndServicesOtherMember2022-12-262023-10-010001171759rrgb:ProductsAndServicesGiftCardMember2024-10-060001171759rrgb:ProductsAndServicesGiftCardMember2023-12-310001171759rrgb:ProductsAndServicesLoyaltyMember2024-10-060001171759rrgb:ProductsAndServicesLoyaltyMember2023-12-310001171759rrgb:ProductsAndServicesGiftCardMember2024-01-012024-10-060001171759rrgb:ProductsAndServicesGiftCardMember2022-12-262023-10-010001171759rrgb:ProductsAndServicesLoyaltyMember2024-07-140001171759rrgb:ProductsAndServicesLoyaltyMember2023-07-090001171759rrgb:ProductsAndServicesLoyaltyMember2022-12-250001171759rrgb:ProductsAndServicesLoyaltyMember2024-07-152024-10-060001171759rrgb:ProductsAndServicesLoyaltyMember2023-07-102023-10-010001171759rrgb:ProductsAndServicesLoyaltyMember2024-01-012024-10-060001171759rrgb:ProductsAndServicesLoyaltyMember2022-12-262023-10-010001171759rrgb:ProductsAndServicesLoyaltyMember2023-10-010001171759us-gaap:DisposalGroupDisposedOfByMeansOtherThanSaleNotDiscontinuedOperationsMemberrrgb:SaleLeasebackTransactionsMember2024-01-012024-04-210001171759us-gaap:DisposalGroupDisposedOfByMeansOtherThanSaleNotDiscontinuedOperationsMemberrrgb:SaleLeasebackTransactionsMember2023-07-102023-10-010001171759us-gaap:DisposalGroupDisposedOfByMeansOtherThanSaleNotDiscontinuedOperationsMemberrrgb:SaleLeasebackTransactionsMember2023-04-172023-07-090001171759us-gaap:RevolvingCreditFacilityMember2024-01-012024-10-060001171759us-gaap:RevolvingCreditFacilityMember2022-12-262023-12-310001171759rrgb:TermLoanMember2024-01-012024-10-060001171759rrgb:TermLoanMember2022-12-262023-12-310001171759rrgb:CreditAgreementDatedMarch42022Member2022-03-040001171759rrgb:CreditAgreementDatedMarch42022Memberus-gaap:RevolvingCreditFacilityMember2022-03-040001171759rrgb:CreditAgreementDatedMarch42022Memberrrgb:TermLoanMember2022-03-0400011717592022-03-040001171759us-gaap:FederalFundsEffectiveSwapRateMember2022-03-042022-03-040001171759us-gaap:SecuredOvernightFinancingRateSofrMember2022-03-042022-03-040001171759rrgb:CreditAgreementDatedMarch42022Memberus-gaap:LineOfCreditMember2024-10-060001171759rrgb:CreditAgreementDatedMarch42022Memberus-gaap:LineOfCreditMember2023-12-310001171759rrgb:CreditAgreementDatedJuly172023Memberrrgb:SaleLeasebacksMember2023-07-172023-07-170001171759us-gaap:RevolvingCreditFacilityMember2024-08-212024-08-210001171759us-gaap:RevolvingCreditFacilityMember2024-08-220001171759us-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2024-08-212024-08-210001171759us-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2024-08-212024-08-210001171759us-gaap:RevolvingCreditFacilityMember2024-10-060001171759us-gaap:RevolvingCreditFacilityMember2024-07-152024-10-060001171759us-gaap:FairValueMeasurementsRecurringMember2024-10-060001171759us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-10-060001171759us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-10-060001171759us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-10-060001171759us-gaap:FairValueMeasurementsRecurringMember2023-12-310001171759us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001171759us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001171759us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001171759rrgb:ThirdAmendmentToCreditAgreementMembersrt:ScenarioForecastMember2026-04-190001171759rrgb:CreditAgreementDatedJuly172023Membersrt:ScenarioForecastMember2025-10-050001171759us-gaap:SubsequentEventMemberus-gaap:RevolvingCreditFacilityMember2024-10-072024-11-06

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 6, 2024

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.)
10000 E. Geddes Avenue, Suite 500
Englewood, Colorado    
     80112
(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)

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 value
RRGBNasdaq(Global Select Market)

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, a 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 

As of November 4, 2024, there were 15,776,961 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 per share amounts)October 6, 2024December 31, 2023
Assets:
Current assets:
Cash and cash equivalents$21,988 $23,634 
Accounts receivable, net11,283 21,592 
Inventories27,498 26,839 
Prepaid expenses and other current assets10,370 11,785 
Restricted cash8,300 7,931 
Total current assets79,439 91,781 
Property and equipment, net217,073 261,258 
Operating lease assets, net345,364 361,609 
Intangible assets, net13,676 15,491 
Other assets, net13,896 11,795 
Total assets$669,448 $741,934 
Liabilities and stockholders' equity (deficit):
Current liabilities:
Accounts payable$29,573 $27,726 
Accrued payroll and payroll-related liabilities33,908 32,524 
Unearned revenue15,338 36,067 
Current portion of operating lease obligations51,423 43,819 
Accrued liabilities and other49,455 46,201 
Total current liabilities179,697 186,337 
Long-term debt180,688 182,594 
Long-term portion of operating lease obligations353,435 383,439 
Other non-current liabilities8,965 10,006 
Total liabilities722,785 762,376 
Commitments and contingencies (see Note 8. Commitments and Contingencies)
Stockholders' equity (deficit):
Common stock; $0.001 par value: 45,000 shares authorized; 20,449 shares issued; 15,779 and 15,528 shares outstanding as of October 6, 2024 and December 31, 2023
20 20 
Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding as of October 6, 2024 and December 31, 2023
  
Treasury stock 4,670 and 4,921 shares, at cost, as of October 6, 2024 and December 31, 2023
(165,747)(174,702)
Paid-in capital225,666 229,680 
Accumulated other comprehensive loss, net of tax(33)(22)
Accumulated deficit(113,243)(75,418)
Total stockholders' equity (deficit)(53,337)(20,442)
Total liabilities and stockholders' equity (deficit)$669,448 $741,934 
See Notes to Condensed Consolidated Financial Statements
1

Table of Contents
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Twelve Weeks EndedForty Weeks Ended
(in thousands, except for per share amounts)October 6, 2024October 1, 2023October 6, 2024October 1, 2023
Revenues:
Restaurant revenue$270,605 $273,133 $943,630 $973,307 
Franchise revenue3,007 3,418 12,635 12,245 
Other revenue1,026 1,009 7,068 8,468 
Total revenues274,638 277,560 963,333 994,020 
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Cost of sales65,105 65,128 224,759 236,171 
Labor107,692 103,741 370,559 358,841 
Other operating49,740 50,351 168,014 174,243 
Occupancy23,826 23,523 79,850 76,806 
Depreciation and amortization13,330 14,672 44,886 52,253 
Selling, general, and administrative expenses26,290 27,961 94,329 89,348 
Pre-opening costs   586 
Other charges (gains), net1,532 (5,878)487 (6,726)
Total costs and expenses287,515 279,498 982,884 981,522 
Income (loss) from operations(12,877)(1,938)(19,551)12,498 
Other expense:
Interest expense6,322 6,103 18,907 20,355 
Interest income and other, net
(225)(158)(676)(814)
Loss before income taxes(18,974)(7,883)(37,782)(7,043)
Income tax provision (benefit)
(98)278 43 453 
Net loss$(18,876)$(8,161)$(37,825)$(7,496)
Loss per share:
Basic$(1.20)$(0.52)$(2.42)$(0.47)
Diluted$(1.20)$(0.52)$(2.42)$(0.47)
Weighted average shares outstanding:
Basic15,754 15,799 15,652 15,949 
Diluted15,754 15,799 15,652 15,949 
Other comprehensive income (loss):
Foreign currency translation adjustment$3 $(12)$(12)$1 
Other comprehensive income (loss), net of tax3 (12)(12)1 
Total comprehensive loss$(18,873)$(8,173)$(37,837)$(7,495)
See Notes to Condensed Consolidated Financial Statements.
2

Table of Contents
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
Common StockTreasury StockAccumulated
Other
Comprehensive
Income/(Loss),
net of tax
Paid-in
Capital
Accumulated Deficit
(in thousands)SharesAmountSharesAmountTotal
Balance, December 31, 202320,449 $20 4,921 $(174,702)$229,680 $(22)$(75,418)$(20,442)
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (84)3,011 (3,382)— — (371)
Non-cash stock compensation— — — — 1,190 — — 1,190 
Net loss— — — — — — (9,460)(9,460)
Other comprehensive income (loss), net of tax— — — — — (18)— (18)
Balance, April 21, 202420,449 $20 4,837 $(171,691)$227,488 $(40)$(84,878)$(29,101)
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (143)5,106 (4,919)— — 187 
Non-cash stock compensation— — — — 1,856 — — 1,856 
Net loss— — — — — — (9,489)(9,489)
Other comprehensive income (loss), net of tax— — — — — 4 — 4 
Balance, July 14, 202420,449 $20 4,694 $(166,585)$224,425 $(36)$(94,367)$(36,543)
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (24)838 (897)— — (59)
Non-cash stock compensation— — — — 2,138 — — 2,138 
Net loss— — — — — — (18,876)(18,876)
Other comprehensive income (loss), net of tax— — — — — 3 — 3 
Balance, October 6, 202420,449 $20 4,670 $(165,747)$225,666 $(33)$(113,243)$(53,337)
3

Table of Contents
Common StockTreasury StockAccumulated
Other
Comprehensive
Income/(Loss),
net of tax
Paid-in
Capital
Accumulated Deficit
(in thousands)SharesAmountSharesAmountTotal
Balance, December 25, 202220,449 $20 4,515 $(182,810)$238,803 $(34)$(54,190)$1,789 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (129)5,330 (5,106)— — 224 
Non-cash stock compensation— — — — 2,179 — — 2,179 
Net loss— — — — — — (3,256)(3,256)
Other comprehensive income (loss), net of tax— — — — — 8 — 8 
Balance, April 16, 202320,449 $20 4,386 $(177,480)$235,876 $(26)$(57,446)$944 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (250)9,933 (8,297)— — 1,636 
Acquisition of treasury stock— — 382 (4,999)— — — (4,999)
Non-cash stock compensation— — — — 1,519 — — 1,519 
Net income
— — — — — — 3,922 3,922 
Other comprehensive income (loss), net of tax— — — — — 4 — 4 
Balance, July 9, 202320,449 $20 4,518 $(172,546)$229,098 $(22)$(53,524)$3,026 
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan— — (31)694 (809)— — (115)
Acquisition of treasury stock— — 480 (4,961)— — — (4,961)
Non-cash stock compensation— — — — 1,480 — — 1,480 
Net loss— — — — — — (8,161)(8,161)
Other comprehensive income (loss), net of tax— — — — — (12)— (12)
Balance, October 1, 202320,449 $20 4,967 $(176,813)$229,769 $(34)$(61,685)$(8,743)
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 6, 2024October 1, 2023
Cash flows from operating activities:
Net loss$(37,825)$(7,496)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization44,886 52,253 
Asset impairment1,306 7,187 
Non-cash other charges (gains), net(68)(1,819)
Stock-based compensation expense5,184 5,171 
Gain on sale of restaurant property
(7,425)(29,865)
Other, net1,574 733 
Changes in operating assets and liabilities, net of business acquisition:
Accounts receivable10,111 9,607 
Income tax receivable197 100 
Inventories(737)(377)
Prepaid expenses and other current assets2,551 1,354 
Operating lease assets, net of liabilities(3,308)(9,975)
Trade accounts payable and accrued liabilities7,936 5,416 
Unearned revenue(20,729)(15,057)
Other operating assets and liabilities, net(1,813)129 
Net cash provided by operating activities1,840 17,361 
Cash flows from investing activities:
Purchases of property, equipment, and intangible assets(19,414)(37,074)
Net proceeds from sale-leaseback23,271 58,801 
Proceeds from sales of property and equipment and other investing activities1,016 794 
Acquisition of franchised restaurants (3,529)
Net cash provided by investing activities
4,873 18,992 
Cash flows from financing activities:
Proceeds from borrowings on revolving credit facilities50,500  
Repayments of borrowings on revolving credit facilities(30,500)(15,000)
Repayments of borrowings on term loan(21,232)(9,857)
Repayments of finance lease obligations(934)(668)
Purchase of treasury stock (9,960)
Debt issuance costs(2,726) 
(Uses) Proceeds from other financing activities, net(3,098)1,744 
Net cash used in financing activities(7,990)(33,741)
Net change in cash and cash equivalents, and restricted cash(1,277)2,612 
Cash and cash equivalents, and restricted cash, beginning of period31,565 58,206 
Cash and cash equivalents, and restricted cash, end of period$30,288 $60,818 
Supplemental disclosure of cash flow information
Income tax paid, net$69 $210 
Interest paid, net of amounts capitalized$16,566 $18,261 
Right of use assets obtained in exchange for operating lease obligations$23,587 $50,769 
Right of use assets obtained in exchange for finance lease obligations$ $81 
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 6, 2024, the Company owned and operated 408 restaurants located in 39 states. The Company also had 92 franchised full-service restaurants in 14 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 Condensed Consolidated Financial Statements on Form 10-K have been condensed or omitted. The Condensed Consolidated Balance Sheet as of December 31, 2023 has been derived from the audited Condensed 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 Condensed Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 28, 2024.
Our current, prior, and upcoming 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, Prior and Upcoming Fiscal Quarters:
First Quarter 2024
April 21, 202416
First Quarter 2023
April 16, 202316
Second Quarter 2024
July 14, 202412
Second Quarter 2023
July 9, 202312
Third Quarter 2024
October 6, 202412
Third Quarter 2023
October 1, 202312
Current and Prior Fiscal Years:
Fiscal Year 2024
December 29, 202452
Fiscal Year 2023
December 31, 202353
Upcoming fiscal year:
Fiscal Year 2025
December 28, 202552




6

Table of Contents


Reclassifications
Certain amounts presented have been reclassified to conform with the current period presentation. The reclassifications had no effect on the Company’s consolidated results. We made adjustments to the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) to disaggregate franchise and other revenue and to disaggregate interest expense and interest income and other, net. Additionally, we made adjustments to the Condensed Consolidated Statements of Cash Flows to disaggregate borrowings and repayments on revolving credit facilities, repayments on the term loan and finance lease obligations and to reclassify gift card breakage within unearned revenue.
Recently Issued and Recently Adopted Accounting Standards
In December 2023, FASB issued Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which updates income tax disclosures related to the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. The amendment also provides further disclosure comparability. The amendment is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied prospectively. However, retrospective application is permitted. We do not expect these amended disclosures will have a material impact to the Company's Consolidated Financial Statements or Notes to the Consolidated Financial Statements upon adoption.
In November 2023, FASB issued Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.
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.
Summary of Significant Accounting Policies
Revenue Recognition - Revenues consist of sales from restaurant operations (including third party delivery), franchise revenue, and other revenue including gift card breakage and miscellaneous revenue. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a restaurant Guest, franchisee, or other customer.
The Company recognizes revenues from restaurant operations when payment is tendered at the point of sale, as the Company's performance obligation to provide food and beverage to the customer has been satisfied.
The Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card balances. We recognize revenue from gift cards as either: (i) Restaurant revenue, when the Company's performance obligation to provide food and beverage to the customer is satisfied upon redemption of the gift card, or (ii) gift card breakage, as discussed below.
Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote and the Company determines there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction. The determination of the gift card breakage rate is based upon the Company's specific historical redemption patterns. The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage on a pro rata basis over the period of estimated redemption.
During the second quarter of fiscal 2024, we re-launched our Red Robin RoyaltyTM program (“Royalty”). Under the re-launched program, Royalty members generally earn points for every dollar spent. We may also periodically offer promotions, which typically provide the customer with the opportunity to earn bonus points or other rewards. Upon reaching certain point thresholds, Royalty members earn rewards that may be redeemed for food and beverage items. Earned rewards generally expire 90 days after they are issued, and points generally expire if a qualifying purchase is not made within 365 days of the last purchase. We defer revenue based on the estimated stand-alone selling price of points or rewards earned by customers as each point or reward is earned, net of points or rewards we do not expect to be redeemed. Our estimate of points and rewards expected to be redeemed is based on historical Company-specific data. We evaluate Royalty redemption rates annually, or more frequently as circumstances warrant. Estimating future redemption rates requires judgment based on current and historical trends, and actual redemption rates may vary from our estimates.
7

Table of Contents
Revenues we receive from our franchise arrangements include sales-based royalties, advertising fund contributions, and franchise fees. Red Robin franchisees are required to remit 4.0% to 5.0% of their revenues as royalties to the Company and contribute up to 3% of revenues to two national advertising funds. The Company recognizes these sales-based royalties and advertising fund contributions as the underlying franchisee sales occur. Contributions to these Advertising Funds from franchisees are recorded as revenue under Franchise revenue in the Consolidated Statements of Operations and Comprehensive Income (Loss) in accordance with ASC Topic 606, Revenue from Contracts with Customers.
The Company typically grants franchise rights to franchisees for a term of 20 years, with the right to extend the term for an additional 10 years if various conditions are satisfied by the franchisee.
Other revenue consists of gift card breakage, licensing income, and recycling income.
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 6, 2024October 1, 2023October 6, 2024October 1, 2023
Restaurant revenue$270,605 $273,133 $943,630 $973,307 
Franchise revenue3,007 3,418 12,635 12,245 
Gift card breakage735 589 5,923 5,930 
Other revenue291 420 1,145 2,538 
Total revenues$274,638 $277,560 $963,333 $994,020 
Contract Liabilities
Components of Unearned revenue in the Condensed Consolidated Balance Sheets are as follows (in thousands):
October 6, 2024December 31, 2023
Unearned gift card revenue$13,005 $28,558 
Unearned Royalty revenue
2,333 7,509 
Unearned revenue
$15,338 $36,067 
Revenue recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (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 6, 2024October 1, 2023
Gift card revenue$15,672 $16,865 
We recognize Royalty revenue within Restaurant revenue in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when a customer redeems an earned reward. Unearned revenue associated with Royalty is included in Unearned revenue in our Condensed Consolidated Balance Sheets.
Changes in our unearned revenue balance related to our Royalty program (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 6, 2024October 1, 2023October 6, 2024October 1, 2023
Unearned Royalty revenue, beginning balance
$1,804 $11,623 $7,509 $11,107 
Revenue deferred914 963 3,953 5,726 
Revenue recognized(1)
(385)(1,188)(9,129)(5,435)
Unearned Royalty revenue, ending balance
$2,333 $11,398 $2,333 $11,398 
(1) Restaurant revenue includes an approximately $6.4 million credit related to the transition to the new Royalty program in the second quarter of 2024, primarily due to the cancellation of unused points that were earned more than 365 days prior to the launch of the new program.
8

Table of Contents
3. Leases
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 Income (Loss) as follows (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 6, 2024October 1, 2023October 6, 2024October 1, 2023
Operating lease cost$17,339 $16,691 $57,757 $53,865 
Finance lease cost:
Amortization of right of use assets216 216 720 764 
Interest on lease liabilities96 116 339 400 
Total finance lease cost$312 $332 $1,059 $1,164 
Variable lease cost4,445 4,994 14,886 15,263 
Total$22,096 $22,017 $73,702 $70,292 
See Note 5, Other Charges (Gains), net, for information regarding the sale-leaseback transactions completed during the quarter and year to date periods ended October 6, 2024 and October 1, 2023, respectively.
4. Earnings (Loss) Per Share
Basic earnings (loss) per share amounts are calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings 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 earnings 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 quarter to date and year to date periods ended October 6, 2024, 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 6, 2024October 1, 2023October 6, 2024October 1, 2023
Basic weighted average shares outstanding15,754 15,799 15,652 15,949 
Dilutive effect of stock options and awards    
Diluted weighted average shares outstanding15,754 15,799 15,652 15,949 
Awards excluded due to anti-dilutive effect on diluted income (loss) per share2,262 1,420 1,846 1,421 
5. Other Charges (Gains), net
Other charges (gains), net consisted of the following (in thousands):
Twelve Weeks EndedForty Weeks Ended
October 6, 2024October 1, 2023October 6, 2024October 1, 2023
Gain on sale of restaurant property
$ $(14,883)$(7,425)$(29,413)
Litigation contingencies
271 3,600 1,047 9,140 
Restaurant closure costs (gains), net
(175)(91)422 1,546 
Severance and executive transition
22 341 1,104 3,195 
Asset impairment
178 4,800 1,306 7,187 
Asset disposal and other, net
1,179 277 3,799 1,366 
Closed corporate office costs, net of sublease income57 78 234 253 
Other charges (gains), net$1,532 $(5,878)$487 $(6,726)

9

Table of Contents
Gain on Sale of Restaurant Property
During the first quarter of fiscal 2024, the Company sold ten restaurant properties for total proceeds of $23.9 million in a sale-leaseback transaction that resulted in a gain, net of expenses of $7.4 million. During the third quarter of fiscal 2023, the Company sold nine restaurant properties for total proceeds of $30.4 million in a sale-leaseback transaction that resulted in a gain, net of expenses of $14.9 million. During the second quarter of fiscal 2023, the Company sold nine restaurant properties for total proceeds of $28.5 million in a sale-leaseback transaction that resulted in a gain, net of expenses of $14.6 million.
Restaurant Closure Costs, net
Restaurant closure costs (gains) include the ongoing restaurant operating costs for closed Company-owned restaurants and closed restaurant lease termination gains or losses.
Severance and Executive Transition
During the third quarter and year to date periods of fiscal 2024, the Company incurred costs primarily related to a reduction in force of Team Members. During the third quarter and year to date periods of fiscal 2023, the Company incurred severance and executive transition costs associated with changes in leadership positions.
Asset Impairment
During the third quarter and year to date periods of fiscal 2024, the Company recognized non-cash impairment charges primarily related to the closure of three and five locations, respectively. During the third quarter and year to date periods of fiscal 2023, the Company recognized non-cash impairment charges primarily related to impairments of long-lived assets at eight and twelve Company-owned locations, respectively. The Company also recognized non-cash impairment charges related to the closed corporate office during the year to date period of fiscal 2023. See Note 7. Fair Value Measurements.
Asset Disposal and Other
Asset disposals and other relate primarily to terminated capital projects, special projects, and initiatives costs.
6. Borrowings
Borrowings as of October 6, 2024 and December 31, 2023 are summarized below (in thousands):
October 6, 2024Variable
Interest Rate
December 31, 2023Variable
Interest Rate
Revolving line of credit$20,000 12.62 %$  %
Term loan$167,911 12.76 %$189,143 11.62 %
Total borrowings187,911 189,143 
Less: unamortized debt issuance costs and discounts7,223 6,549 
Long-term debt$180,688 $182,594 
Revolving line of credit unamortized deferred financing charges:$1,116 $752 
Credit Agreement
On March 4, 2022, the Company entered into a credit agreement (the "Credit Agreement") by and among the Company, Red Robin International, Inc., as the borrower, the lenders from time to time party thereto, the issuing banks from time to time party thereto, Fortress Credit Corp., as Administrative Agent and as Collateral Agent and JPMorgan Chase Bank, N.A., as Sole Lead Arranger and Sole Bookrunner. The five-year $240.0 million Credit Agreement provides for a $40.0 million revolving line of credit and a $200.0 million term loan (collectively, the "Credit Facility"). The borrower maintains the option to increase the Credit Facility in the future, subject to lenders’ participation, by up to an additional $40.0 million in the aggregate on the terms and conditions set forth in the Credit Agreement.
The Credit Facility will mature on March 4, 2027. No amortization is required with respect to the revolving line of credit. The term loans require quarterly principal payments in an aggregate annual amount equal to 1.0% of the original principal amount of the term loan. Quarterly principal payments are no longer required as a result of the debt repayments from the proceeds of the sale-leaseback transactions. The Credit Agreement's interest rate references the Secured Overnight Financing Rate ("SOFR"), a new index calculated by short-term repurchase agreements and backed by U.S. Treasury securities, or the Alternate Base Rate, which represents the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.5% per annum, or (c) one-month term SOFR plus 1.0% per annum.
10

Table of Contents
As of October 6, 2024, the Company had outstanding borrowings under the Credit Facility of $180.7 million, including $20.0 million drawn on its revolving line of credit. As of December 31, 2023, the Company had outstanding borrowings under the Credit Facility of $182.6 million, with no amounts drawn on its revolving line of credit. In addition, the Company had amounts issued under letters of credit of $8.1 million and $7.7 million as of October 6, 2024 and December 31, 2023, respectively.
Red Robin International, Inc., is the borrower under the Credit Agreement, and certain of its subsidiaries and the Company are guarantors of the borrower’s obligations under the Credit Agreement. Borrowings under the Credit Agreement are secured by substantially all of the assets of the borrower and the guarantors, including the Company, and are available to: (i) refinance certain existing indebtedness of the borrower and its subsidiaries, (ii) pay any fees and expenses in connection with the Credit Agreement, and (iii) provide for the working capital and general corporate requirements of the Company, the borrower and its subsidiaries, including permitted acquisitions and capital expenditures, but excluding restricted payments.
On March 4, 2022, Red Robin International, Inc., the Company, and the guarantors also entered into a Pledge and Security Agreement (the “Security Agreement”) granting to the Administrative Agent a first priority security interest in substantially all of the assets of the borrower and the guarantors to secure the obligations under the Credit Agreement.
Red Robin International, Inc. as the borrower is obligated to pay customary fees to the agents, lenders and issuing banks under the Credit Agreement with respect to providing, maintaining, or administering, as applicable, the credit facilities.
On July 17, 2023, the Company amended the Credit Agreement (the “First Amendment”) to, among other things, remove the previously included $50.0 million aggregate cap on sale-leasebacks of Company-owned real property that are permitted under the Credit Agreement, subject to certain conditions set forth in the Credit Agreement.
On August 21, 2024, the Company entered into the second amendment to our Credit Agreement (the “Second Amendment”). The Second Amendment, among other things, provides certain relief from the financial covenant by increasing the required maximum net total leverage ratio beginning in the third quarter of 2024 through the end of the third quarter of 2025; increases the aggregate revolving commitments by $15.0 million to $40.0 million through the end of the third quarter of 2025; removes the variable pricing grid and increases the applicable margin on all term loans and revolving loans that are SOFR-based loans to 7.50% per annum and that are ABR-based loans to 6.50% per annum; and adds certain additional reporting requirements.
In conjunction with the execution of the Second Amendment, the Company paid certain customary amendment fees to the lenders under the credit facility totaling approximately $2.9 million. The Company performed an analysis of the Second Amendment under ASC Topic 470, Debt, and determined that debt modification accounting was appropriate for our term loan and revolving line of credit due to the change in total capacity and the increase in applicable margin interest rates under the new amendment. During the third quarter of 2024, the Company capitalized $2.7 million of the amendment fees as deferred loan fees which will be amortized over the remaining term of the Credit Facility, and expensed the remaining $0.2 million of fees.
The summary descriptions of the Credit Agreement, the Security Agreement, the First Amendment, and the Second Amendment, do not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, each of which was filed February 28, 2024, as an exhibit to the Annual Report on Form 10-K, except for the Second Amendment which was filed August 22, 2024 as an exhibit to the Quarterly Report on Form 10-Q for the period ended July 14, 2024.
On November 4, 2024, the Company entered into the third amendment to our Credit Agreement (the "Third Amendment"). See Note 9. Subsequent Event.
11

Table of Contents
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 Company maintains a rabbi trust to fund obligations under a deferred compensation plan. Amounts in the rabbi trust are invested in mutual funds, which are designated as trading securities and carried at fair value and are included in Other assets, net in the accompanying Condensed Consolidated Balance Sheets. Fair market value of mutual funds is measured using level 1 inputs (quoted prices for identical assets in active markets).
The following tables present the Company's assets measured at fair value on a recurring basis (in thousands):
October 6, 2024Level 1Level 2Level 3
Assets:    
Investments in rabbi trust$1,853 $1,853 $ $ 
Total assets measured at fair value$1,853 $1,853 $ $ 
December 31, 2023Level 1Level 2Level 3
Assets:
Investments in rabbi trust$2,079 $2,079 $ $ 
Total assets measured at fair value$2,079 $2,079 $ $ 
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities recognized or disclosed at fair value in the Condensed Consolidated Financial Statements on a nonrecurring basis include items such as property, plant and equipment, right of use assets, and other intangible assets. These assets are measured at fair value if determined to be impaired.
During 2024 and 2023, the Company 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.
During the third quarter and year to date periods of fiscal 2024, we impaired long-lived assets at three and five restaurant locations, respectively, with a carrying value of approximately $1.9 million and $5.0 million, respectively. We determined the fair value of these long-lived assets to be $1.1 million and $2.0 million as a result of the closures, resulting in a $0.2 million and $1.3 million impairment charge and a $0.6 million and $1.7 million decrease in right of use assets due to remeasurement for the quarter and year to date periods of fiscal 2024, respectively. During the third quarter and year to date periods of fiscal 2023, we impaired long-lived assets at eight and twelve restaurant locations, respectively. We also impaired the closed corporate office during the year to date period of 2023. The carrying value of the assets impaired in the third quarter of 2023 was $15.3 million and the carrying value of the assets impaired during the year to date period of 2023 was $27.7 million. We determined the fair value of these long-lived assets to be $10.5 million and $20.5 million, resulting in a $4.8 million and $7.2 million impairment charge during the quarter and year to date periods of fiscal 2023, respectively.
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 6, 2024, the fair value of the Credit Facility was approximately $178.0 million and the principal amount carrying value was $187.9 million. The Credit Facility term loan is reported net of $7.2 million in unamortized discount and debt issuance costs in the Condensed Consolidated Balance Sheet as of October 6, 2024. The carrying value of the Credit Facility was $189.1 million and the fair value of the Credit Facility was $186.9 million as of December 31, 2023. The interest rate on the Credit Facility represents a level 2 fair value input.
12

Table of Contents

8. Commitments and Contingencies
Because litigation is inherently unpredictable, assessing contingencies related to litigation is a complex process involving highly subjective judgment about potential outcomes of future events. When evaluating litigation contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the availability of appellate remedies, insurance coverage related to the claim or claims in question, the presence of complex or novel legal theories, and the ongoing discovery and development of information important to the matter. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to possible outcomes, and as such are not meaningful indicators of our potential liability or financial exposure. Accordingly, we review the adequacy of accruals and disclosures each quarter in consultation with legal counsel, and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Condensed Consolidated Financial Statements. However, the ultimate resolution of litigated claims may differ from our current estimates.
As of October 6, 2024, we had reserves of $8.3 million for loss contingencies included within Accrued liabilities and other on our Condensed Consolidated Balance Sheet. In the normal course of business, there are various claims in process, matters in litigation, administrative proceedings, and other contingencies. These include employment related claims and class action lawsuits, claims from Guests or Team Members alleging illness, injury, food quality, health, or operational concerns, and lease and other commercial disputes. To date, none of these claims, certain of which are covered by insurance policies, have had a material effect on the Company. 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. However, a significant increase in the number of these claims, or one or more successful claims resulting in greater liabilities than we currently anticipate, could materially and adversely affect our business, financial condition, results of operations, and cash flows.
As of October 6, 2024, we had non-cancellable purchase commitments primarily related to certain vendors who provide food and beverage and other supplies to our restaurants, for an aggregate of $188.1 million. We expect to fulfill our commitments under these agreements in the normal course of business, and as such, no liability has been recorded.
9. Subsequent Event
Subsequent to the end of the third quarter of fiscal 2024, the Company entered into the Third Amendment to our Credit Agreement (the “Third Amendment”). The Third Amendment amends the Credit Agreement to:
increase the permitted Maximum Net Total Leverage Ratio beginning in the fourth fiscal quarter of 2025 through the end of the first fiscal quarter of 2026;
maintain the revolving commitments under the Credit Agreement at $40 million through the end of the first fiscal quarter of 2026. The revolving commitments were previously scheduled to be reduced to $25 million at the end of the third fiscal quarter of 2025.
In conjunction with the Third Amendment, the Company paid certain customary amendment fees to the lenders under the credit facility totaling approximately $1.6 million, which will be added to the term loan and payable at maturity. Terms in this section that are capitalized but not defined have the meanings given to them in the Third Amendment. The summary description of the Third Amendment does not purport to be complete and is qualified in its entirety to the full text of the Third Amendment, which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.


13

Table of Contents
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. References to the third quarter and year to date periods of fiscal 2024 and fiscal 2023 refer to the twelve and forty weeks ended October 6, 2024 and October 1, 2023, respectively.
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 500 locations in North America. As of October 6, 2024, the Company owned 408 restaurants located in 39 states, and had 92 franchised restaurants in 14 states and one Canadian province. The Company operates its business as one operating and one reportable segment.
Our primary source of revenue is from the sale of food and beverages at Company-owned restaurants. We also earn revenue from royalties and fees from franchised restaurants.
Highlights for the Third Quarter of Fiscal 2024, Compared to the Third Quarter of Fiscal 2023:
Total revenues are $274.6 million, a decrease of $2.9 million.
Comparable restaurant revenue(1) increased 0.6%.
Net loss is $18.9 million, compared to a net loss of $8.2 million last year.
Adjusted EBITDA(2) is $2.1 million compared to $6.8 million last year.
Relaunched Loyalty Program increased to 14.5 million members compared to 13.1 million last year.
Subsequent to the close of the third quarter, executed an amendment to the credit agreement that extends the adjustments to the financial covenants and expanded revolver capacity through the first quarter of fiscal 2026.
Highlights for the Year to Date Period of Fiscal 2024, Compared to the Year to Date Period of Fiscal 2023:
Total revenues are $963.3 million, a decrease of $30.7 million.
Comparable restaurant revenue(1) declined 2.6% excluding a deferred revenue benefit led by the change in the Company's loyalty program. Including this benefit, Comparable restaurant revenue(1) declined 2.1%.
Net loss is $37.8 million, compared to net loss of $7.5 million last year.
Adjusted EBITDA(2) is $26.1 million compared to $58.3 million last year.
Completed a sale-leaseback transaction for ten restaurants in the first quarter of fiscal 2024, generating net proceeds of approximately $23.3 million and a gain, net of expenses of $7.4 million.
(1) Comparable restaurant revenue represents revenue from Company-owned restaurants that have operated for 18 months as of the beginning of the period presented.
(2) See below for a reconciliation of Adjusted EBITDA to Net income (loss).
Key Performance Indicators
Restaurant Revenue, compared to the same quarter in the prior year, is presented in the table below:
(Dollars in millions)Twelve Weeks EndedForty Weeks Ended
Restaurant Revenue for the period ended October 1, 2023
$273.1 $973.3 
Increase/(decrease) in comparable restaurant revenue1.5 (19.6)
Decrease in non-comparable and closed restaurant revenue
(4.1)(10.1)
Total increase/(decrease)(2.6)(29.7)
Restaurant Revenue for the period ended October 6, 2024
$270.5 $943.6 

14

Table of Contents
Restaurant Data
The following table details restaurant unit data for our Company-owned and franchised locations for the periods presented:
Twelve Weeks EndedForty Weeks Ended
October 6, 2024October 1, 2023October 6, 2024October 1, 2023
Company-owned:   
Beginning of period411 418 415 414 
Opened during the period— — — 
Acquired from franchisees— — — 
Closed during the period(3)(1)(7)(3)
End of period408 417 408 417 
Franchised:  
Beginning of period92 91 92 97 
Opened during the period— — — — 
Closed during the period— — — (1)
Sold to Company during the period— — — (5)
End of period92 91 92 91 
Total number of restaurants500 508 500 508 
Comparable Restaurant Revenue
As of the first quarter of fiscal 2024, the Company revised its definition of comparable restaurant revenue to reflect Company-owned restaurants that have operated for 18 months as of the beginning of the period presented. The prior definition included Company-owned restaurants that have operated for five full quarters as of the beginning of the period presented. The Company believes this change will provide investors with a better understanding of our financial performance from period to period. The change did not have a material impact on previously reported results and as such, prior periods were not revised to reflect the new definition.
For the third quarter and year to date periods of fiscal 2024, there were 402 and 401 comparable restaurants, respectively.
15

Table of Contents
The following table presents total Company-owned and franchised restaurants by state or province as of October 6, 2024:
 Company-Owned RestaurantsFranchised Restaurants
State:
Arkansas21
Alaska3
Alabama3
Arizona181
California57
Colorado21
Connecticut3
Delaware5
Florida17
Georgia6
Iowa5
Idaho8
Illinois17
Indiana11
Kansas5
Kentucky4
Louisiana1
Massachusetts5
Maryland11
Maine2
Michigan19
Minnesota4
Missouri83
Montana1
North Carolina17
Nebraska4
New Hampshire3
New Jersey111
New Mexico3
Nevada6
New York14
Ohio163
Oklahoma5
Oregon155
Pennsylvania1120
Rhode Island1
South Carolina4
South Dakota1
Tennessee9
Texas189
Utah15
Virginia18
Washington37
Wisconsin11
Province:
British Columbia11
Total40892



16

Table of Contents
Results of Operations
Operating results for each fiscal period presented below are expressed as a percentage of total revenues, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenue.
This information has been prepared on a basis consistent with our audited 2023 annual financial statements, and, in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the information for the periods presented. Our operating results may fluctuate significantly as a result of a variety of factors, and operating results for any period presented are not necessarily indicative of results for a full fiscal year.

Twelve Weeks EndedForty Weeks Ended
 (Dollars in thousands)October 6, 2024October 1, 2023October 6, 2024October 1, 2023
Revenues: 
Restaurant revenue98.5 %98.4 %98.0 %97.9 %
Franchise revenue1.1 1.2 1.3 1.2 
Other revenue0.4 0.4 0.7 0.9 
Total revenues100.0 100.0 100.0 100.0 
Costs and expenses: 
Restaurant operating costs (1) (excluding depreciation and amortization shown separately below):
 
Cost of sales24.1 23.8 23.8 24.3 
Labor39.8 38.0 39.3 36.9 
Other operating18.4 18.4 17.8 17.9 
Occupancy8.8 8.6 8.5 7.9 
Total restaurant operating costs90.9 88.8 89.3 86.8 
Depreciation and amortization4.9 5.3 4.7 5.3 
Selling, general, and administrative expenses9.6 10.1 9.8 9.0 
Pre-opening costs— — — 0.1 
Other charges (gains), net0.6 (2.1)0.1 (0.7)
Income (loss) from operations(4.7)(0.7)(2.0)1.3 
Other expense (income):
Interest expense2.3 2.3 2.0 2.1 
Interest income and other, net(0.1)(0.2)(0.1)(0.1)
Loss before income taxes(6.9)(2.8)(3.9)(0.7)
Income tax provision (benefit)— 0.1 — — 
Net loss(6.9)%(2.9)%(3.9)%(0.8)%
(1)    Expressed as a percentage of restaurant revenue.
17

Table of Contents
Revenues
Twelve Weeks EndedForty Weeks Ended
(Dollars in thousands)October 6, 2024October 1, 2023Percent ChangeOctober 6, 2024October 1, 2023Percent Change
Restaurant revenue$270,605 $273,133 (0.9)%$943,630 $973,307 (3.0)%
Franchise revenue3,007 3,418 (12.0)%12,635 12,245 3.2 %
Other revenue1,026 1,009 1.7 %7,068 8,468 (16.5)%
Total revenues$274,638 $277,560 (1.1)%$963,333 $994,020 (3.1)%
Average weekly net sales volumes in Company-owned restaurants$55,007 $54,572 0.8 %$57,261 $58,446 (2.0)%
Total operating weeks4,920 5,005 (1.7)%16,480 16,653 (1.0)%
Restaurant revenue, which is comprised primarily of food and beverage sales, decreased $2.5 million, or 0.9%, in the third quarter of fiscal 2024, as compared to the comparable period of 2023. Restaurant revenue decreased primarily due to the closure of 9 locations subsequent to October 1, 2023. Comparable restaurant revenue increased 0.6% and includes a 4.9% increase in average Guest check offset in part by a 4.3% decrease in Guest count. The increase in average Guest check resulted from a 7.5% increase in menu prices, partially offset by a 1.1% decrease from menu mix and a 1.4% decrease from additional discounts. The decrease in menu mix was primarily driven by greater incidence of promotional menu items offered at reduced prices.
Restaurant revenue decreased $29.7 million or 3.0% in the year to date period of fiscal 2024, as compared to the same period of 2023. Restaurant revenue decreased primarily due to a 2.1% decrease in comparable restaurant revenue inclusive of a benefit from the change in the Company's loyalty program. Comparable restaurant revenue reflects a 6.5% decrease in Guest count, partially offset by a 4.4% increase in average Guest check. The decrease in Guest count is due in part to overlapping elevated performance in the first quarter of fiscal 2023, our exit of virtual brands in the third quarter of fiscal 2023, and adverse weather impacts during the first quarter of fiscal 2024. The increase in average Guest check resulted from a 6.7% increase in menu prices, partially offset by a 2.0% decrease from menu mix and a 0.8% decrease from discounts. The decrease in menu mix was primarily driven by Guests shifting visits from third party delivery platforms with elevated menu prices, to dine in visits at standard menu prices, and reduced incidence of add on menu items. Dine-in sales comprised 76.5% of total food and beverage sales during the year to date period of 2024, as compared to 74.8% in the same period in 2023.
Average weekly net sales volumes are calculated as the total restaurant revenue for all Company-owned Red Robin restaurants for each time period presented, divided by the number of operating weeks in the period.
Franchise revenue decreased by $0.4 million, or 12.0%, in the third quarter of fiscal 2024 compared to the same period of 2023, primarily due to a decrease in franchisee contributions. Franchise revenue increased by $0.4 million, or 3.2%, in the year to date period of fiscal 2024 compared to the same period of 2023, primarily due to an increase in franchisee contributions. Franchisee contributions were reduced in the third quarter of fiscal 2024 in line with the reduction in overall selling expense, following an increase in the first half of fiscal 2024. Franchise restaurants reported a decrease of 1.6% in comparable restaurant revenue in the third quarter of fiscal 2024 and a decrease of 2.7% for the year to date period of fiscal 2024 compared to the same periods in fiscal 2023.
Other revenue did not change and decreased $1.4 million in the third quarter and year to date periods of fiscal 2024 compared to 2023, respectively. The decrease in the year to date period of fiscal 2024 compared to 2023 is primarily related to business interruption insurance recoveries recognized in 2023.
Cost of Sales
Twelve Weeks EndedForty Weeks Ended
(In thousands, except percentages)October 6, 2024October 1, 2023Percent ChangeOctober 6, 2024October 1, 2023Percent Change
Cost of sales$65,105 $65,128 — %$224,759 $236,171 (4.8)%
As a percent of restaurant revenue24.1 %23.8 %0.3 %23.8 %24.3 %(0.5)%
Cost of sales, which comprises food and beverage costs, is variable and generally fluctuates with sales volume. Cost of sales as a percentage of restaurant revenue increased 30 basis points for the third quarter of fiscal 2024 as compared to the comparable period in 2023. The increase was primarily driven by commodity inflation, product mix shift to higher cost menu items, and higher discounts, partially offset by menu price increases and vendor contributions to support our Managing Partner conference recorded as a reduction to cost of sales.
18

Table of Contents
Cost of sales as a percentage of restaurant revenue decreased 50 basis points for the year to date period of fiscal 2024 as compared to the comparable period in 2023. The improvement was primarily driven by menu price increases and implementation of various cost savings initiatives, partially offset by product mix shifts to higher cost menu items and commodity inflation.
Labor
Twelve Weeks EndedForty Weeks Ended
(In thousands, except percentages)October 6, 2024October 1, 2023Percent ChangeOctober 6, 2024October 1, 2023Percent Change
Labor$107,692 $103,741 3.8 %$370,559 $358,841 3.3 %
As a percent of restaurant revenue39.8 %38.0 %1.8 %39.3 %36.9 %2.4 %
Labor costs include restaurant level hourly wages and management salaries as well as related taxes and benefits. For the third quarter of fiscal 2024, labor as a percentage of restaurant revenue increased 180 basis points compared to the same period in 2023. The increase was primarily driven by strategic investments in management labor and incentive compensation related to a new partner bonus plan, increased hourly labor costs, and higher workers compensation insurance costs.
For the year to date period of fiscal 2024, labor as a percentage of restaurant revenue increased 240 basis points compared to the same period in 2023. The increase was primarily driven by strategic investments in hourly and management labor, increased incentive compensation related to a new partner bonus plan, and higher workers compensation and group health insurance costs.
Other Operating
Twelve Weeks EndedForty Weeks Ended
(In thousands, except percentages)October 6, 2024October 1, 2023Percent ChangeOctober 6, 2024October 1, 2023Percent Change
Other operating$49,740 $50,351 (1.2)%$168,014 $174,243 (3.6)%
As a percent of restaurant revenue18.4 %18.4 %— %17.8 %17.9 %(0.1)%
Other operating costs include costs such as repair and maintenance costs, restaurant supplies, utilities, restaurant technology, and other miscellaneous costs. For the third quarter of fiscal 2024, other operating costs as a percentage of restaurant revenue is unchanged compared to the same period in 2023.
For the year to date period of fiscal 2024, other operating costs as a percentage of restaurant revenue decreased 10 basis points as compared to the same period in 2023. The decrease was primarily driven by reduced third party commission expenses associated with lower off premise mix and lower commission rates.
Occupancy
Twelve Weeks EndedForty Weeks Ended
(In thousands, except percentages)October 6, 2024October 1, 2023Percent ChangeOctober 6, 2024October 1, 2023Percent Change
Occupancy$23,826 $23,523 1.3 %$79,850 $76,806 4.0 %
As a percent of restaurant revenue8.8 %8.6 %0.2 %8.5 %7.9 %0.6 %
Occupancy costs include fixed rents, property taxes, common area maintenance charges, general liability insurance, contingent rents, and other property costs. Occupancy costs as a percentage of restaurant revenue increased 20 basis points for the third quarter of fiscal 2024 compared to the same period in 2023. The increase is due primarily to the impact of fixed rents associated with the sale-leaseback of 28 locations.
Occupancy costs as a percentage of restaurant revenue increased 60 basis points for the year to date period of fiscal 2024 compared to the same period in 2023. The increase is due primarily to the impact of fixed rents associated with the sale-leaseback of 28 locations and the acquisition of five restaurants from a franchisee in the second quarter of fiscal 2023.

19

Table of Contents
Depreciation and Amortization
Twelve Weeks EndedForty Weeks Ended
(In thousands, except percentages)October 6, 2024October 1, 2023Percent ChangeOctober 6, 2024October 1, 2023Percent Change
Depreciation and amortization$13,330 $14,672 (9.1)%$44,886 $52,253 (14.1)%
As a percent of total revenues4.9 %5.3 %(0.4)%4.7 %5.3 %(0.6)%
Depreciation and amortization include depreciation on capital expenditures for restaurants and corporate assets as well as amortization of reacquired franchise rights, leasehold interests, and certain liquor licenses. For the third quarter of fiscal 2024, depreciation and amortization expense as a percentage of revenue decreased 40 basis points compared to the comparable period in 2023, primarily due to asset impairments and sale-leaseback transactions reducing the depreciable asset base.
For the year to date period of fiscal 2024, depreciation and amortization expense as a percentage of revenue decreased 60 basis points compared to the comparable period in 2023, primarily due to asset impairments and sale-leaseback transactions reducing the depreciable asset base.
Selling, General, and Administrative
Twelve Weeks EndedForty Weeks Ended
(In thousands, except percentages)October 6, 2024October 1, 2023Percent ChangeOctober 6, 2024October 1, 2023Percent Change
Selling, general, and administrative$26,290 $27,961 (6.0)%$94,329 $89,348 5.6 %
As a percent of total revenues9.6 %10.1 %(0.5)%9.8 %9.0 %0.8 %
Selling, general, and administrative costs include all corporate and administrative functions. Components of this category include marketing and advertising costs; restaurant support center, regional, and franchise support salaries and benefits; travel; professional and consulting fees; corporate information systems; legal expenses; office rent; training; and Board of Directors' expenses. Selling, general and administrative expense decreased $1.7 million, or 6.0% in the third quarter of fiscal 2024 as compared to the comparable period in 2023.
General and administrative costs in the third quarter of fiscal 2024 were $20.8 million, an increase of $2.3 million compared to the comparable period in 2023. The increase is primarily related to costs incurred for the 2024 Managing Partner conference, partially offset by reduced incentive compensation and legal fees as compared to the prior year quarter.
Selling costs in the third quarter of fiscal 2024 were $5.5 million, a decrease of $4.0 million compared to the comparable period in 2023. The decrease was primarily driven by reduced marketing communication with consumers and related production costs.
General and administrative costs in the year to date period of fiscal 2024 were $63.3 million, a decrease of $1.5 million compared to the comparable period in 2023. The decrease is primarily related to reduced incentive compensation accruals as compared to the same period last year, partially offset by costs associated with the 2024 Managing Partner conference.
Selling costs in the year to date period of fiscal 2024 were $31.1 million, an increase of $6.5 million compared to the comparable period in 2023. The increase was primarily driven by increased marketing communication with consumers and related production costs in the first half of fiscal 2024.
20

Table of Contents
Pre-opening Costs
Twelve Weeks EndedForty Weeks Ended
(In thousands, except percentages)October 6, 2024October 1, 2023Percent ChangeOctober 6, 2024October 1, 2023Percent Change
Pre-opening costs$— $— — %$— $586 (100.0)%
As a percent of total revenues— %— %— %— %0.1 %(0.1)%
Pre-opening costs, which are expensed as incurred, comprise the costs related to preparing restaurants to introduce Donatos® and other initiatives, as well as direct costs, including labor, occupancy, training, and marketing, incurred related to opening new restaurants and hiring the initial work force. Our pre-opening costs fluctuate from period to period, depending upon, but not limited to, the number of restaurants where Donatos® has been introduced, the number of restaurant openings, the size of the restaurants being opened, and the location of the restaurants. Pre-opening costs for any period will typically include expenses associated with restaurants opened during the period as well as expenses related to restaurants opening in subsequent periods.
We did not open any new restaurants or roll out any Donatos® locations in the year to date period of fiscal 2024. We opened one restaurant and completed the rollout of 25 Donatos® locations in the year to date period of fiscal 2023.
Interest Expense
Interest expense for the third quarter of fiscal 2024 and 2023 was $6.3 million and $6.1 million, respectively. The $0.2 million increase was primarily due to an increase in the weighted average interest rate to 14.0% in the third quarter of fiscal 2024 compared to 13.4% in the prior year quarter. Average outstanding debt was $191.6 million and $194.5 million as of October 6, 2024 and October 1, 2023, respectively.
Interest expense was $18.9 million for the year to date period of fiscal 2024 and $20.4 million for the year to date period of fiscal 2023. The $1.4 million decrease was primarily due to the net paydown of debt with the proceeds from the sale-leaseback transactions, partially offset by an increase in the weighted average interest rate to 13.3% for the year to date period of fiscal 2024 compared to 12.6% in the same period last year. Average outstanding debt was $185.2 million and $205.9 million as of October 6, 2024 and October 1, 2023, respectively.
Income Tax Provision
The effective tax rate for the third quarter of fiscal 2024 was a 0.5% benefit, compared to a 3.5% expense for the third quarter of fiscal 2023. The effective tax rate for the year to date period of fiscal 2024 was 0.1%, compared to 6.4% for the year to date period of fiscal 2023. The effective tax rate for the quarter and year to date periods of fiscal 2024 reflects the valuation allowance recorded against the Company's net tax assets in addition to certain state income taxes due to attribute limitations, minimum state income taxes, and state franchise taxes. The higher effective tax rate for the fiscal 2023 periods as compared to the fiscal 2024 periods is due to the near break-even pretax book income generated in fiscal 2023.
21

Table of Contents
Non-GAAP Financial Measures
Restaurant revenue and operating costs, and restaurant level operating profit for the periods presented are detailed in the table below:
Twelve Weeks EndedForty Weeks Ended
(Dollars in millions)October 6, 2024October 1, 2023Increase/
(Decrease)
October 6, 2024October 1, 2023Increase/
(Decrease)
Restaurant revenue$270.6 $273.1 (0.9)%$943.6 $973.3 (3.0)%
Restaurant operating costs:
Cost of sales65.1 65.1 — %224.8 236.2 (4.8)%
Labor107.7 103.7 3.9 %370.6 358.8 3.3 %
Other operating49.7 50.4 (1.4)%168.0 174.2 (3.6)%
Occupancy23.8 23.5 1.3 %79.9 76.8 4.0 %
Total Restaurant Operating Costs$246.4 $242.7 1.5 %$843.2 $846.1 (0.3)%
Restaurant level operating profit(1)
$24.2 $30.4 (20.4)%$100.4 $127.2 (21.1)%
(1) Restaurant level operating profit is a non-GAAP measure. See below for a reconciliation of restaurant level operating profit to income from operations and income from operations as a percentage of total revenues.

Twelve Weeks EndedForty Weeks Ended
(Dollars in millions)October 6, 2024October 1, 2023Increase/
(Decrease)
October 6, 2024October 1, 2023Increase/(Decrease)
Restaurant revenue $270.6 $273.1 (0.9)%$943.6 $973.3 (3.0)%
Restaurant operating costs:(Percentage of Restaurant Revenue)(Basis
Points)
(Percentage of Restaurant Revenue)(Basis
Points)
Cost of sales24.1 %23.8 %30 23.8 %24.3 %(50)
Labor39.8 38.0 180 39.3 36.9 240 
Other operating18.4 18.4 — 17.8 17.9 (10)
Occupancy