Quarterly report pursuant to Section 13 or 15(d)

Basis of Presentation and Recent Accounting Pronouncements

v3.23.3
Basis of Presentation and Recent Accounting Pronouncements
 9 Months Ended
Oct. 01, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Recent Accounting Pronouncements 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 1, 2023, the Company owned and operated 417 restaurants located in 39 states. The Company also had 91 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 consolidated financial statements on Form 10-K have been condensed or omitted. The Condensed Consolidated Balance Sheet as of December 25, 2022 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 25, 2022 filed with the SEC on February 28, 2023.
Our current, prior, and upcoming year periods, period end dates, and number of weeks included in the period are summarized in the table below:
Periods Period End Date Number of Weeks in Period
Current and Prior Fiscal Quarters:
First Quarter 2023
 April 16, 2023 16
First Quarter 2022
 April 17, 2022 16
Second Quarter 2023
 July 9, 2023 12
Second Quarter 2022
 July 10, 2022 12
Third Quarter 2023
 October 1, 2023 12
Third Quarter 2022
 October 2, 2022 12
Current and Prior Fiscal Years:
Fiscal Year 2023
 December 31, 2023 53
Fiscal Year 2022
 December 25, 2022 52
Upcoming fiscal year:
Fiscal Year 2024
 December 29, 2024 52
Immaterial Restatement of Prior Period Financial Statements
As previously disclosed in our Form 10-Q for the period ended July 9, 2023, the Company discovered a multi-year error in its calculation and recognition of revenue related to gift cards, primarily related to breakage revenue that had been recognized for bonus and discounted gift cards for which no or discounted monetary consideration was received, which resulted in the Company overstating total revenues by $0.1 million and $0.6 million for the twelve and forty weeks ended October 2, 2022. Management has evaluated this misstatement and concluded it was not material to prior periods, individually or in the aggregate. However, correcting the cumulative effect of the error in the twelve and forty weeks ended October 2, 2022 would have had a significant effect on the results of operations for such periods. Therefore, the Company is correcting the relevant prior period Condensed Consolidated Financial Statements and related footnotes for this error for comparative purposes.
The following tables reflect the effects of the correction on all affected line items of the Company's previously reported Condensed Consolidated Financial Statements presented in this Form 10-Q:
CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited)
Twelve Weeks Ended October 2, 2022
Forty Weeks Ended October 2, 2022
(in thousands) As Previously Reported Adjustment As Corrected As Previously Reported Adjustment As Corrected
Restaurant revenue $ 282,449  $ (34) $ 282,415  $ 951,718  $ (85) $ 951,633 
Franchise and other revenues 4,439  (49) 4,390  24,810  (508) 24,302 
Total revenues 286,888  (83) 286,805  976,528  (593) 975,935 
Loss before income taxes (12,610) (83) (12,693) (33,152) (593) (33,744)
Net loss (12,567) (83) (12,650) (33,605) (593) (34,197)
Net loss per share (0.79) (0.01) (0.80) (2.12) (0.04) (2.16)
Total comprehensive loss (12,612) (83) (12,695) (33,656) (593) (34,249)
OTHER NON-GAAP INFORMATION:
Adjusted EBITDA 3,960  (83) 3,877  43,900  (189) 43,711 
CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (unaudited)
Forty Weeks Ended October 2, 2022
(in thousands) Retained Earnings/(Accumulated Deficit) Total Shareholders' Equity
As Previously Reported
Balance, July 10, 2022 6,159  61,575 
Net loss (12,567) (12,567)
Balance, October 2, 2022 (6,408) 51,627 
Adjustments
Balance, July 10, 2022 (3,013) (3,013)
Net loss (83) (83)
Balance, October 2, 2022 (3,096) (3,096)
As Corrected
Balance, July 10, 2022 3,146  58,562 
Net loss (12,650) (12,650)
Balance, October 2, 2022 $ (9,504) $ 48,531 
CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Forty Weeks Ended October 2, 2022
(in thousands) As Previously Reported Adjustment As Corrected
Net loss $ (33,605) $ (593) $ (34,198)
Gift card breakage (8,289) 508  (7,781)
Unearned revenue (8,386) 85  (8,301)