Operating Results

Total Company revenues, which include Company-owned restaurant revenues and franchise royalties, increased 3.4% to $213.3 million in the fiscal third quarter of 2012 versus $206.2 million in the same period last year. System-wide restaurant revenues in the fiscal third quarter of 2012 totaled $291.8 million, compared to $287.1 million in the same period last year at constant currency rates. Fiscal third quarter 2012 Company revenues were increased by approximately $1.0 million due to changes to Red Royalty™ incentives, which reduced deferred revenue.

Comparable restaurant revenues increased 1.1% for Company-owned restaurants in the fiscal third quarter of 2012 compared to the fiscal third quarter of 2011. Guest counts increased 0.8% in the third quarter compared to a year ago while average guest check increased 0.3%, including 0.5% related to the changes to Red Royalty™ incentives. Year to date through the fiscal third quarter of 2012, comparable restaurant revenues increased 0.9% compared to a year ago and were driven by a 1.9% increase in average guest check, partially offset by a 1.0 % decrease in guest counts.

Average weekly revenues in Company-owned Red Robin ® restaurants increased to $52,780 per unit in the fiscal third quarter of 2012 (3,959 operating weeks) compared to $52,370 a year ago (3,870 operating weeks). In the Company’s franchised restaurants, average weekly revenues per unit were $51,510 in the fiscal third quarter of 2012 (1,592 operating weeks) compared to $51,330 last year (1,644 operating weeks).

Restaurant-level operating profit margins at Company-owned restaurants were 19.7% in the fiscal third quarter of 2012 compared to 18.8% in the fiscal third quarter of 2011, an improvement of 90 basis points. The higher margins resulted primarily from lower average food costs, particularly dairy and produce, improved sales mix, and lower other operating costs partially offset by higher labor costs and occupancy expenses. Schedule II of this earnings release defines restaurant-level operating profit, discusses why it is a useful metric for investors and reconciles this metric to income from operations and net income.

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