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Red Robin Gourmet Burgers Reports Results For The Fiscal Second Quarter Ended July 14, 2013

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

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

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

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

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

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

Investor Conference Call and Webcast

Red Robin will host an investor conference call to discuss its second quarter 2013 results today at 10:00 a.m. ET. The conference call number is (888) 670-2246, or for international callers (913) 312-1507. The financial information that the Company intends to discuss during the conference call is included in this press release and will be available on the “Investors” link of the Company’s website at www.redrobin.com. Prior to the conference call, the Company will post supplemental financial information that will be discussed during the call and live webcast.

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

About Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB)

Red Robin Gourmet Burgers, Inc. ( www.redrobin.com), a casual dining restaurant chain founded in 1969 that operates through its wholly-owned subsidiary, Red Robin International, Inc., is the gourmet burger expert, famous for serving more than two dozen craveable, high-quality burgers with Bottomless Steak Fries ® in a fun environment. Red Robin’s award-winning burgers have earned the title of Best Burger in the full-service category in the Zagat Fast Food Survey four years in a row. In addition to its many burger offerings, Red Robin serves a wide variety of salads, soups, appetizers, entrees, desserts and signature Mad Mixology ® Beverages. There currently are 480 Red Robin locations across the United States and Canada, including 341 company-owned Red Robin restaurants and five Red Robin’s Burger Works locations, and 134 Red Robin restaurants operating under franchise agreements. Red Robin… YUMMM ®! Connect with Red Robin on Facebook and Twitter.

Forward-Looking Statements:

Forward-looking statements in this press release regarding our expected earnings per share, restaurant sales, new restaurant growth, brand transformation initiative, future economic performance, costs and capital expenditures, certain statements under the heading “Outlook for 2013” and all other statements that are not historical facts, are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on assumptions believed by the Company to be reasonable and speak only as of the date on which such statements are made. Without limiting the generality of the foregoing, words such as “expect,” “believe,” “anticipate,” “intend,” “plan,” “project,” or “estimate,” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. We undertake no obligation to update such statements to reflect events or circumstances arising after such date, and we caution investors not to place undue reliance on any such forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements based on a number of factors, including but not limited to the following: the effectiveness of the Company’s marketing strategies, loyalty program and guest count initiatives to achieve restaurant sales growth; the ability to fulfill planned expansion; the cost and availability of key food products, labor and energy; the ability to achieve anticipated revenue and cost savings from our anticipated new technology systems and other initiatives; availability of capital or credit facility borrowings; the adequacy of cash flows or available debt resources to fund operations and growth opportunities; federal, state and local regulation of our business; and other risk factors described from time to time in the Company’s Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) filed with the U.S. Securities and Exchange Commission.

RED ROBIN GOURMET BURGERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

           
Twelve Weeks Ended Twenty-eight Weeks Ended
July 14, 2013 July 8, 2012 July 14, 2013 July 8, 2012
 
Revenues:
Restaurant revenue $ 234,490 $ 219,932 $ 535,803 $ 514,574
Franchise royalties, fees and other revenue   3,809   3,745   8,845   8,562
Total revenues   238,299   223,677   544,648   523,136
 
Costs and expenses:

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

Cost of sales 58,024 55,804 133,006 130,879
Labor 76,648 73,075 178,530 171,681
Other operating 28,463 28,877 65,553 66,282
Occupancy 16,779 15,790 39,352 36,904
Depreciation and amortization 13,319 12,532 31,153 29,184
General and administrative 21,868 18,881 50,835 44,381
Selling 6,518 6,693 15,159 15,070
Pre-opening costs   1,291   602   2,125   1,585
Total costs and expenses   222,910   212,254   515,713   495,966
 
Income from operations 15,389 11,423 28,935 27,170
 
Other expense:
Interest expense, net and other   674   1,267   1,763   3,100
 
Income before income taxes 14,715 10,156 27,172 24,070
Provision for income taxes   3,576   2,408   6,553   5,764
Net income $ 11,139 $ 7,748 $ 20,619 $ 18,306
Earnings per share:
Basic $ 0.78 $ 0.53 $ 1.46 $ 1.25
Diluted $ 0.77 $ 0.52 $ 1.43 $ 1.23
Weighted average shares outstanding:
Basic   14,209   14,607   14,134   14,609
Diluted   14,475   14,859   14,415   14,879
 

RED ROBIN GOURMET BURGERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(Unaudited)

     
July 14, 2013 December 30, 2012
 
Assets:
Current Assets:
Cash and cash equivalents $ 16,545 $ 22,440
Accounts receivable, net 13,011 16,386
Inventories 19,885 18,371
Prepaid expenses and other current assets 9,651 13,439
Deferred tax asset and other   3,222     3,868  
Total current assets   62,314     74,504  
 
Property and equipment, net 418,582 413,258
Goodwill 62,525 62,525
Intangible assets, net 36,066 37,203
Other assets, net   9,699     9,642  
Total assets $ 589,186   $ 597,132  
 
Liabilities and Stockholders’ Equity:
Current Liabilities:
Trade accounts payable $ 18,447 $ 14,241
Construction related payables 6,894 4,694
Accrued payroll and payroll related liabilities 37,419 31,476
Unearned revenue, net 20,529 28,187
Accrued liabilities and other   28,986     23,685  
Total current liabilities   112,275     102,283  
 
Deferred rent 49,456 44,801
Long-term portion of credit facility 72,500 125,000
Long-term portion of capital lease obligations 8,830 9,211
Other non-current liabilities   9,243     8,918  
Total liabilities   252,304     290,213  
 
Stockholders’ Equity:

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

18 17

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

- -
Treasury stock, 3,500 shares, at cost (107,589 ) (107,589 )
Paid-in capital 195,267 185,974
Accumulated other comprehensive gain, net of tax 55 5
Retained earnings   249,131     228,512  
Total stockholders’ equity   336,882     306,919  
Total liabilities and stockholders’ equity $ 589,186   $ 597,132  
 

Schedule I

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income from Operations and Net Income (In thousands, except percentage data)

The Company believes that restaurant-level operating profit is an important measure for management and investors because it is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. The Company defines restaurant-level operating profit to be restaurant revenues minus restaurant-level operating costs, excluding restaurant closures and impairment costs. The measure includes restaurant level occupancy costs, which include fixed rents, percentage rents, common area maintenance charges, real estate and personal property taxes, general liability insurance and other property costs, but excludes depreciation related to restaurant buildings and leasehold improvements. The measure excludes depreciation and amortization expense, substantially all of which is related to restaurant level assets, because such expenses represent historical sunk costs which do not reflect current cash outlay for the restaurants. The measure also excludes selling, general and administrative costs, and therefore excludes occupancy costs associated with selling, general and administrative functions, and pre-opening costs. The Company excludes restaurant closure costs as they do not represent a component of the efficiency of continuing operations. Restaurant impairment costs are excluded, because, similar to depreciation and amortization, they represent a non-cash charge for the Company’s investment in its restaurants and not a component of the efficiency of restaurant operations. Restaurant-level operating profit is not a measurement determined in accordance with generally accepted accounting principles (“GAAP”) and should not be considered in isolation, or as an alternative, to income from operations or net income as indicators of financial performance. Restaurant-level operating profit as presented may not be comparable to other similarly titled measures of other companies. The table below sets forth certain unaudited information for the twelve and twenty-eight weeks ended July 14, 2013 and July 8, 2012, expressed as a percentage of total revenues, except for the components of restaurant level operating profit, which are expressed as a percentage of restaurant revenues.

                 
Twelve Weeks Ended Twenty-eight Weeks Ended

July 14, 2013

July 8, 2012

July 14, 2013

July 8, 2012

Restaurant revenues $ 234,490 98.4 % $ 219,932 98.3 % $ 535,803 98.4 % $ 514,574 98.4 %

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

Cost of sales 58,024 24.7 55,804 25.4 133,006 24.8 130,879 25.4
Labor 76,648 32.7 73,075 33.2 178,530 33.3 171,681 33.4
Other operating 28,463 12.1 28,877 13.1 65,553 12.2 66,282 12.9
Occupancy   16,779 7.2   15,790 7.2   39,352 7.3   36,904 7.2
Restaurant-level operating profit   54,576 23.3   46,386 21.1   119,362 22.3   108,828 21.1
 
Add – Franchise royalties, fees and other revenue 3,809 1.6 3,745 1.7 8,845 1.6 8,562 1.6
Deduct – other operating:
Depreciation and amortization 13,319 5.6 12,532 5.6 31,153 5.7 29,184 5.6
General and administrative 21,868 9.2 18,881 8.4 50,835 9.3 44,381 8.5
Selling 6,518 2.7 6,693 3.0 15,159 2.8 15,070 2.9
Pre-opening costs   1,291 0.5   602 0.3   2,125 0.4   1,585 0.3
Total other operating   42,996 18.0   38,708 17.3   99,272 18.2   90,220 17.3
 
Income from operations 15,389 6.5 11,423 5.1 28,935 5.3 27,170 5.2
 
Interest expense, net and other 674 0.3 1,267 0.6 1,763 0.3 3,100 0.6
Income tax expense   3,576 1.5   2,408 1.1   6,553 1.2   5,764 1.1
Total other   4,250 1.7   3,675 1.7   8,316 1.4   8,864 1.7
 
Net income $ 11,139 4.7 % $ 7,748 3.5 % $ 20,619 3.8 % $ 18,306 3.5 %
 

Certain percentage amounts in the table above do not total due to rounding as well as the fact that components of restaurant level operating profit are expressed as a percentage of restaurant revenues and not total revenues.

Stock quotes in this article: RRGB 

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