Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________________________________________________________________________________________________ FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 ☐ 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 0 ...

Red Robin Gourmet Burgers, Inc. Reports Results for the Fiscal Fourth Quarter and Fiscal Year Ended December 31, 2023 1.6% increase in fiscal 2023 comparable restaurant revenue $57.7 million improvement in net loss and a 33% increase in Adjusted EBITDA during fiscal 2023 Englewood, CO – February 28, 2024 – Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) ("Red Robin" or the "Company"), a full-service restaurant chain serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORM 10-Q (Mark One) For the quarterly period ended October 1, 2023 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) Delaware 84-1573084 (State or oth ...

Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) Q3 2023 Earnings Conference Call November 1, 2023 4:30 PM ET Company Participants G.J. Hart – President and Chief Executive Officer Todd Wilson – Chief Financial Officer Conference Call Participants Todd Brooks – Benchmark Company Alex Slagle – Jefferies Andrew Wolf – CL King Operator Good afternoon, everyone. And welcome to the Red Robin Gourmet Burgers, Incorporated Third Quarter 2023 Earnings Call. This conference is being recorded. During management’s presen ...

Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) Q2 2023 Results Conference Call August 17, 2023 5:00 PM ET Company Participants G.J. Hart - CEO Todd Wilson - CFO Conference Call Participants Alex Slagle - Jefferies Andrew Wolf - CL King Todd Brooks - Benchmark Company Operator Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers, Inc. Second Quarter 2023 Earnings Call. This conference is being recorded. During management's presentation and in response to your questions, they will be making ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) Presents unaudited financial statements and management's analysis for Red Robin Gourmet Burgers, Inc [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Provides unaudited financial statements and notes, detailing an immaterial restatement for gift card revenue [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Summarizes the company's assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets (in thousands) | (in thousands) | July 9, 2023 | December 25, 2022 | Change | | :--- | :--- | :--- | :--- | | **Assets:** | | | | | Cash and cash equivalents | $44,034 | $48,826 | $(4,792) | | Total current assets | $109,698 | $119,580 | $(9,882) | | Total assets | $798,398 | $832,145 | $(33,747) | | **Liabilities & Stockholders' Equity:** | | | | | Total current liabilities | $204,344 | $220,213 | $(15,869) | | Long-term debt | $188,090 | $203,155 | $(15,065) | | Total liabilities | $795,372 | $830,356 | $(34,984) | | Total stockholders' equity | $3,026 | $1,789 | $1,237 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details the company's revenues, expenses, and net income or loss over specific periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) | (in thousands, except per share amounts) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Change (YoY) | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenues | $298,648 | $294,056 | +1.6% | $716,460 | $689,130 | +4.0% | | Income (loss) from operations | $10,257 | $(13,385) | N/A | $14,437 | $(9,491) | N/A | | Net income (loss) | $3,922 | $(17,966) | N/A | $664 | $(21,547) | N/A | | Basic earnings (loss) per share | $0.24 | $(1.13) | N/A | $0.04 | $(1.37) | N/A | | Diluted earnings (loss) per share | $0.24 | $(1.13) | N/A | $0.04 | $(1.37) | N/A | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Tracks changes in the company's equity accounts, including common stock, paid-in capital, and accumulated deficit Condensed Consolidated Statements of Stockholders' Equity (in thousands) | (in thousands) | Balance, December 25, 2022 | Balance, July 9, 2023 | Change | | :--- | :--- | :--- | :--- | | Common Stock Amount | $20 | $20 | $0 | | Treasury Stock Amount | $(182,810) | $(172,546) | $10,264 | | Paid-in Capital | $238,803 | $229,098 | $(9,705) | | Accumulated Other Comprehensive Income/(Loss), net of tax | $(34) | $(22) | $12 | | Accumulated Deficit | $(54,190) | $(53,524) | $666 | | Total Stockholders' Equity | $1,789 | $3,026 | $1,237 | - Total stockholders' equity increased from **$1.8 million** at December 25, 2022, to **$3.0 million** at July 9, 2023, primarily due to net income and changes in treasury stock and paid-in capital[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Categorizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $18,225 | $36,439 | $(18,214) | | Net cash used in investing activities | $(98) | $(15,624) | $15,526 | | Net cash provided by (used in) financing activities | $(20,086) | $15,455 | $(35,541) | | Net change in cash and cash equivalents, and restricted cash | $(1,959) | $36,264 | $(38,223) | | Cash and cash equivalents, and restricted cash, end of period | $56,247 | $59,014 | $(2,767) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the condensed consolidated financial statements - The Company operates **418 owned** and **91 franchised** full-service restaurants across North America as of July 9, 2023[23](index=23&type=chunk)[74](index=74&type=chunk) - An immaterial restatement was made for prior period financial statements due to a multi-year error in gift card breakage revenue recognition, which had overstated total revenues[28](index=28&type=chunk)[157](index=157&type=chunk) [1. Basis of Presentation and Recent Accounting Pronouncements](index=9&type=section&id=1.%20Basis%20of%20Presentation%20and%20Recent%20Accounting%20Pronouncements) Outlines company operations and details an immaterial restatement for gift card revenue - The Company operates **418 owned** and **91 franchised** full-service restaurants in 39 states and one Canadian province as of July 9, 2023[23](index=23&type=chunk) - An immaterial restatement was performed for prior period financial statements due to a multi-year error in gift card breakage revenue recognition, which had overstated total revenues; the cumulative impact of the error correction on unearned revenue was an increase of **$3.6 million** as of December 25, 2022[28](index=28&type=chunk)[29](index=29&type=chunk) [2. Revenue](index=12&type=section&id=2.%20Revenue) Disaggregates total revenues by source and details components of unearned revenue Disaggregation of Revenue (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | | :--- | :--- | :--- | :--- | :--- | | Restaurant revenue | $293,281 | $288,621 | $700,174 | $669,218 | | Franchise revenue | $3,544 | $4,362 | $8,826 | $10,642 | | Gift card breakage | $533 | $282 | $5,342 | $7,640 | | Other revenue | $1,290 | $791 | $2,118 | $1,630 | | Total revenues | $298,648 | $294,056 | $716,460 | $689,130 | Unearned Revenue Components (in thousands) | (in thousands) | July 9, 2023 | December 25, 2022 | | :--- | :--- | :--- | | Unearned gift card revenue | $22,185 | $35,837 | | Deferred loyalty revenue | $11,623 | $11,107 | [3. Leases](index=12&type=section&id=3.%20Leases) Provides a breakdown of operating, finance, and variable lease costs for the reporting periods Lease Expense (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | | :--- | :--- | :--- | :--- | :--- | | Operating lease cost | $16,279 | $16,422 | $37,174 | $38,111 | | Total finance lease cost | $332 | $391 | $833 | $878 | | Variable lease cost | $4,477 | $4,682 | $10,269 | $11,007 | | Total lease cost | $21,088 | $21,495 | $48,276 | $49,996 | [4. Earnings (Loss) Per Share](index=13&type=section&id=4.%20Earnings%20(Loss)%20Per%20Share) Presents basic and diluted earnings per share calculations, including weighted average shares outstanding Weighted Average Shares Outstanding (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | | :--- | :--- | :--- | :--- | :--- | | Basic weighted average shares outstanding | 16,037 | 15,830 | 16,014 | 15,783 | | Dilutive effect of stock options and awards | 254 | — | 353 | — | | Diluted weighted average shares outstanding | 16,291 | 15,830 | 16,367 | 15,783 | [5. Other Charges (Gains), net](index=13&type=section&id=5.%20Other%20Charges%20(Gains),%20net) Details non-operating charges and gains, including sale-leaseback transactions and asset impairments Other Charges (Gains), net (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | | :--- | :--- | :--- | :--- | :--- | | Gain on sale leaseback, net of expenses | $(14,586) | $— | $(14,586) | $— | | Litigation contingencies | $1,240 | $(1,806) | $5,540 | $(86) | | Restaurant closure costs, net | $(112) | $930 | $1,638 | $1,879 | | Severance and executive transition | $962 | $129 | $2,854 | $129 | | Asset impairment | $1,693 | $8,739 | $2,387 | $10,861 | | Other charges (gains), net | $(10,607) | $8,146 | $(848) | $13,453 | - During Q2 2023, the Company sold **nine restaurant properties** in a sale-leaseback transaction, generating **$28.5 million** in proceeds and a **$14.6 million** gain[40](index=40&type=chunk) - The Company recognized non-cash impairment charges of **$1.7 million** related to restaurant assets at four Company-owned restaurants and **$0.7 million** for its closed corporate office during the twenty-eight weeks ended July 9, 2023[44](index=44&type=chunk) [6. Borrowings](index=14&type=section&id=6.%20Borrowings) Summarizes the company's debt structure, including its credit facility and recent amendments Borrowings Summary (in thousands) | (in thousands) | July 9, 2023 | December 25, 2022 | | :--- | :--- | :--- | | Revolving line of credit | $— | $15,000 | | Term loan | $197,500 | $199,000 | | Notes payable | $875 | $875 | | Total borrowings | $198,375 | $214,875 | | Long-term debt (net of unamortized debt issuance costs and current portion) | $188,090 | $203,155 | - The Company's Credit Agreement, established March 4, 2022, provides a **$25.0 million** revolving line of credit and a **$200.0 million** term loan, maturing on March 4, 2027[49](index=49&type=chunk)[50](index=50&type=chunk) - On July 17, 2023, the Credit Agreement was amended to remove the **$50.0 million** cap on sale-leasebacks of Company-owned real property, allowing for reinvestment of proceeds up to the prior cap and mandatory prepayment for amounts exceeding it[55](index=55&type=chunk) [7. Fair Value Measurements](index=16&type=section&id=7.%20Fair%20Value%20Measurements) Describes fair value measurement of assets and liabilities, including investments and the credit facility Assets Measured at Fair Value on a Recurring Basis (in thousands) | (in thousands) | July 9, 2023 | December 25, 2022 | | :--- | :--- | :--- | | Investments in rabbi trust | $2,994 | $4,250 | - Non-financial assets, such as property, plant, equipment, and right-of-use assets, are measured at fair value on a nonrecurring basis if impaired, using Level 3 fair value measurements based on unobservable inputs[61](index=61&type=chunk)[62](index=62&type=chunk) - As of July 9, 2023, the fair value of the credit facility was approximately **$196.7 million**, compared to a principal carrying value of **$197.5 million**[64](index=64&type=chunk) [8. Commitments and Contingencies](index=17&type=section&id=8.%20Commitments%20and%20Contingencies) Outlines the company's legal loss contingencies and non-cancellable purchase commitments - As of July 9, 2023, the Company had **$10.1 million** in loss contingencies, primarily for employment-related claims, class action lawsuits, and other commercial disputes[67](index=67&type=chunk) - The Company had non-cancellable purchase commitments totaling **$127.7 million** for food, beverages, and other supplies as of July 9, 2023[68](index=68&type=chunk) [9. Acquisition of Franchised Restaurants](index=18&type=section&id=9.%20Acquisition%20of%20Franchised%20Restaurants) Details the acquisition of five franchised restaurants and the allocation of the purchase price - On April 17, 2023, the Company acquired **five franchised restaurants** for **$3.5 million** in cash, resulting in goodwill primarily from the assembled workforce[70](index=70&type=chunk)[71](index=71&type=chunk) Acquisition Purchase Price Allocation (in thousands) | (in thousands) | Fair Value at Acquisition Date | | :--- | :--- | | Property and equipment, net | $2,637 | | Operating lease assets, net | $(850) | | Other assets, net of liabilities | $299 | | Intangible assets, net | $1,443 | | Total purchase price | $3,529 | - The company discovered a multi-year error in gift card revenue recognition, primarily related to breakage revenue for bonus and discounted gift cards, leading to an overstatement of total revenues in prior periods; this error was deemed immaterial to prior periods but required correction for comparative purposes in the current filing[28](index=28&type=chunk)[157](index=157&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial performance, revenue growth, improved net income, Adjusted EBITDA, and changes in costs, liquidity, and capital - Total revenues increased by **1.6% to $298.6 million** for the twelve weeks and by **4.0% to $716.5 million** for the twenty-eight weeks ended July 9, 2023, compared to prior year periods[76](index=76&type=chunk)[90](index=90&type=chunk) - Net income significantly improved, reaching **$3.9 million** for the twelve weeks and **$0.7 million** for the twenty-eight weeks ended July 9, 2023, compared to losses in the prior year; Adjusted EBITDA also saw substantial increases[76](index=76&type=chunk)[80](index=80&type=chunk) - The Company completed a sale-leaseback transaction for **nine restaurants**, generating **$28.5 million** in net proceeds and a **$14.6 million** gain, which was used to repay **$15.5 million** of debt and repurchase **$5.0 million** of stock[76](index=76&type=chunk) [Overview](index=19&type=section&id=Overview) Provides a high-level summary of the company's business, key financial highlights, and operational achievements - Red Robin operates **418 Company-owned** and **91 franchised restaurants** across North America as of July 9, 2023[74](index=74&type=chunk) Highlights for Q2 2023 vs. Q2 2022 | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Total revenues | $298.6 million | $294.0 million | +$4.6 million | | Comparable restaurant revenue growth | +1.5% | N/A | N/A | | Comparable restaurant dine-in sales growth | +5.9% | N/A | N/A | | Net income | $3.9 million | $(17.9) million | +$21.9 million | | Adjusted EBITDA | $15.5 million | $11.8 million | +$3.7 million | Highlights for YTD 2023 vs. YTD 2022 | Metric | YTD 2023 | YTD 2022 | Change | | :--- | :--- | :--- | :--- | | Total revenues | $716.5 million | $689.1 million | +$27.3 million | | Comparable restaurant revenue growth | +5.5% | N/A | N/A | | Comparable restaurant dine-in sales growth | +11.8% | N/A | N/A | | Net income | $0.7 million | $(21.5) million | +$22.2 million | | Adjusted EBITDA | $51.5 million | $39.8 million | +$11.6 million | - The Company completed a sale-leaseback transaction for **nine restaurants**, generating **$28.5 million** in net proceeds and a **$14.6 million** gain, and subsequently repaid **$15.5 million** of debt and repurchased **$5.0 million** of stock[76](index=76&type=chunk) [Description of Business](index=19&type=section&id=Description%20of%20Business) Describes Red Robin Gourmet Burgers, Inc.'s operations as a full-service restaurant operator and franchisor - Red Robin Gourmet Burgers, Inc. operates and franchises full-service restaurants, with **418 Company-owned** and **91 franchised locations** in North America as of July 9, 2023[74](index=74&type=chunk) [Highlights for the Second Quarter of Fiscal 2023, Compared to the Second Quarter of Fiscal 2022](index=19&type=section&id=Highlights%20for%20the%20Second%20Quarter%20of%20Fiscal%202023,%20Compared%20to%20the%20Second%20Quarter%20of%20Fiscal%202022) Summarizes key financial and operational achievements for Q2 fiscal 2023 versus the prior year Q2 2023 Financial Highlights (YoY Change) | Metric | Q2 2023 Value | YoY Change | | :--- | :--- | :--- | | Total revenues | $298.6 million | +$4.6 million | | Comparable restaurant revenue | +1.5% | N/A | | Comparable restaurant dine-in sales | +5.9% | N/A | | Net income | $3.9 million | +$21.9 million | | Adjusted EBITDA | $15.5 million | +$3.7 million | - The Company achieved its **tenth consecutive quarter of comparable restaurant revenue growth**[76](index=76&type=chunk) - A sale-leaseback transaction for **nine restaurants** generated **$28.5 million** in net proceeds and a **$14.6 million** gain, enabling **$15.5 million** in debt repayment and **$5.0 million** in stock repurchases[76](index=76&type=chunk) [Highlights for the Year to Date Period of Fiscal 2023, Compared to the Year to Date Period of Fiscal 2022](index=19&type=section&id=Highlights%20for%20the%20Year%20to%20Date%20Period%20of%20Fiscal%202023,%20Compared%20to%20the%20Year%20to%20Date%20Period%20of%20Fiscal%202022) Summarizes key financial and operational achievements for YTD fiscal 2023 versus the prior year YTD 2023 Financial Highlights (YoY Change) | Metric | YTD 2023 Value | YoY Change | | :--- | :--- | :--- | | Total revenues | $716.5 million | +$27.3 million | | Comparable restaurant revenue | +5.5% | N/A | | Comparable restaurant dine-in sales | +11.8% | N/A | | Net income | $0.7 million | +$22.2 million | | Adjusted EBITDA | $51.5 million | +$11.6 million | [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Analyzes the company's revenue and expense trends, detailing changes in key operating cost categories Key Operating Results as % of Revenue | Metric (% of Revenue) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | | :--- | :--- | :--- | :--- | :--- | | Restaurant revenue | 98.2% | 98.2% | 97.7% | 97.1% | | Franchise and other revenues | 1.8% | 1.8% | 2.3% | 2.9% | | Total revenues | 100.0% | 100.0% | 100.0% | 100.0% | | Cost of sales | 24.3% | 25.2% | 24.4% | 24.5% | | Labor | 37.4% | 35.2% | 36.4% | 35.8% | | Other operating | 17.7% | 18.0% | 17.7% | 17.9% | | Occupancy | 8.0% | 8.0% | 7.6% | 8.0% | | Depreciation and amortization | 5.3% | 6.0% | 5.2% | 6.0% | | Selling, general, and administrative expenses | 9.0% | 10.9% | 8.6% | 9.6% | | Income (loss) from operations | 3.4% | (4.6)% | 2.0% | (1.4)% | | Net income (loss) | 1.3% | (6.1)% | 0.1% | (3.1)% | [Revenues](index=28&type=section&id=Revenues) Analyzes the drivers of changes in restaurant, franchise, and total revenues for the reporting periods Revenue Performance (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Percent Change | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Restaurant revenue | $293,281 | $288,621 | 1.6% | $700,174 | $669,218 | 4.6% | | Franchise and other revenues | $5,367 | $5,435 | (1.3)% | $16,286 | $19,912 | (18.2)% | | Total revenues | $298,648 | $294,056 | 1.6% | $716,460 | $689,130 | 4.0% | | Average weekly net sales volumes (Company-owned) | $58,477 | $56,633 | 3.3% | $60,124 | $56,123 | 7.1% | - Restaurant revenue increased by **1.6%** for the twelve weeks and **4.6%** for the twenty-eight weeks, driven by a **7.5% (12-week)** and **7.7% (28-week) increase in average Guest check** due to menu pricing, partially offset by a decrease in Guest count and menu mix shifts from third-party delivery to dine-in[91](index=91&type=chunk)[92](index=92&type=chunk) - Franchise and other revenue decreased by **1.3% (12-week)** and **18.2% (28-week)**, primarily due to a reduction in the percentage of sales franchisees contribute to Selling activities, aligning with a focus on local marketing[94](index=94&type=chunk) [Cost of Sales](index=29&type=section&id=Cost%20of%20Sales) Examines changes in cost of sales, both in absolute terms and as a percentage of restaurant revenue Cost of Sales Performance (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Percent Change | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cost of sales | $71,372 | $72,702 | (1.8)% | $171,042 | $163,643 | 4.5% | | As a percent of restaurant revenue | 24.3% | 25.2% | (0.9)% | 24.4% | 24.5% | (0.1)% | - Cost of sales as a percentage of restaurant revenue decreased by **90 basis points** for the twelve weeks and **10 basis points** for the twenty-eight weeks, primarily due to menu pricing, partially offset by commodity inflation[95](index=95&type=chunk)[96](index=96&type=chunk) [Labor](index=29&type=section&id=Labor) Details changes in labor costs and their impact on restaurant revenue percentage Labor Costs Performance (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Percent Change | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Labor | $109,678 | $101,643 | 7.9% | $255,100 | $239,751 | 6.4% | | As a percent of restaurant revenue | 37.4% | 35.2% | 2.2% | 36.4% | 35.8% | 0.6% | - Labor costs as a percentage of restaurant revenue increased by **220 basis points** for the twelve weeks and **60 basis points** for the twenty-eight weeks, primarily due to investments in hourly labor, payroll taxes, and incentive compensation, partially offset by group insurance and sales leverage[98](index=98&type=chunk)[99](index=99&type=chunk) [Other Operating](index=30&type=section&id=Other%20Operating) Analyzes changes in other operating expenses and their proportion to restaurant revenue Other Operating Costs Performance (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Percent Change | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Other operating | $51,842 | $52,003 | (0.3)% | $123,892 | $119,867 | 3.4% | | As a percent of restaurant revenue | 17.7% | 18.0% | (0.3)% | 17.7% | 17.9% | (0.2)% | - Other operating costs as a percentage of restaurant revenue decreased by **30 basis points** for the twelve weeks and **20 basis points** for the twenty-eight weeks, driven by reduced third-party commission expenses, lower supplies costs, and lower contract janitorial expenses, partially offset by higher repairs and maintenance[100](index=100&type=chunk)[101](index=101&type=chunk) [Occupancy](index=30&type=section&id=Occupancy) Reviews changes in occupancy costs and their relationship to restaurant revenue Occupancy Costs Performance (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Percent Change | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Occupancy | $23,482 | $22,980 | 2.2% | $53,283 | $53,579 | (0.6)% | | As a percent of restaurant revenue | 8.0% | 8.0% | 0.0% | 7.6% | 8.0% | (0.4)% | - Occupancy costs as a percentage of restaurant revenue remained flat for the twelve weeks but decreased by **40 basis points** for the twenty-eight weeks, primarily due to sales leverage and the impact of closed restaurants, despite increased insurance costs[102](index=102&type=chunk)[104](index=104&type=chunk) [Depreciation and Amortization](index=30&type=section&id=Depreciation%20and%20Amortization) Discusses trends in depreciation and amortization expense relative to total revenues Depreciation and Amortization Performance (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Percent Change | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Depreciation and amortization | $15,756 | $17,637 | (10.7)% | $37,581 | $41,556 | (9.6)% | | As a percent of total revenues | 5.3% | 6.0% | (0.7)% | 5.2% | 6.0% | (0.8)% | - Depreciation and amortization expense as a percentage of revenue decreased by **70 basis points** for the twelve weeks and **80 basis points** for the twenty-eight weeks, primarily due to net Company-owned restaurant closures, asset impairments, and sales leverage[107](index=107&type=chunk)[108](index=108&type=chunk) [Selling, General, and Administrative](index=31&type=section&id=Selling,%20General,%20and%20Administrative) Analyzes changes in selling, general, and administrative expenses and their impact on total revenues Selling, General, and Administrative Costs Performance (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Percent Change | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Selling, general, and administrative | $26,864 | $32,095 | (16.3)% | $61,387 | $66,475 | (7.7)% | | As a percent of total revenues | 9.0% | 10.9% | (1.9)% | 8.6% | 9.6% | (1.0)% | - General and administrative costs increased by **$1.9 million (12-week)** and **$4.3 million (28-week)** due to higher incentive compensation, lower capitalized costs, and increased travel, partially offset by reduced wages and stock compensation from a reduction in force[110](index=110&type=chunk)[111](index=111&type=chunk) - Selling costs decreased by **$7.2 million (12-week)** and **$9.4 million (28-week)** due to lower internet, local media, and Donatos marketing spend[111](index=111&type=chunk)[112](index=112&type=chunk) [Pre-opening Costs](index=31&type=section&id=Pre-opening%20Costs) Details fluctuations in pre-opening costs related to new restaurant openings and Donatos rollouts Pre-opening Costs Performance (in thousands) | (in thousands) | Twelve Weeks Ended July 9, 2023 | Twelve Weeks Ended July 10, 2022 | Percent Change | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Pre-opening costs | $4 | $235 | (98.3)% | $586 | $297 | 97.3% | | As a percent of total revenues | 0.0% | 0.1% | (0.1)% | 0.1% | 0.0% | 0.1% | - Pre-opening costs decreased significantly for the twelve weeks due to no new restaurant openings or Donatos rollouts, but increased for the twenty-eight weeks due to **one new restaurant opening** and the rollout of **25 Donatos locations**[112](index=112&type=chunk) [Interest Expense, Net and Other](index=32&type=section&id=Interest%20Expense,%20Net%20and%20Other) Explains changes in net interest expense and other related financial items - Interest expense, net and other, increased by **$2.1 million to $6.2 million** for the twelve weeks and by **$2.0 million to $13.6 million** for the twenty-eight weeks, primarily due to a higher weighted average interest rate (**11.1% vs 8.7% for 12 weeks; 12.3% vs 8.4% for 28 weeks**) and higher average outstanding debt[113](index=113&type=chunk)[114](index=114&type=chunk) - Interest income and other shifted from income to expense, decreasing by **$0.3 million (12-week)** and **$0.9 million (28-week)**, due to investment losses related to the deferred compensation plan held in a rabbi trust[115](index=115&type=chunk)[116](index=116&type=chunk) [Income Tax Provision](index=32&type=section&id=Income%20Tax%20Provision) Discusses the effective tax rate and its primary drivers for the reporting periods - The effective tax rate was a **3.8% benefit** for the twelve weeks ended July 9, 2023, compared to a **2.5% expense** in the prior year, and a **21.0% benefit** for the twenty-eight weeks, compared to a **2.4% expense** in the prior year, primarily due to changes in the valuation allowance[117](index=117&type=chunk)[118](index=118&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to generate and manage cash, including cash flow activities, debt, and share repurchases - Cash and cash equivalents, and restricted cash decreased by **$2.0 million to $56.2 million** as of July 9, 2023[119](index=119&type=chunk) - The Company had approximately **$69.0 million in liquidity** as of July 9, 2023, including cash and available borrowing capacity under its Credit Facility[119](index=119&type=chunk) - The Company resumed its share repurchase program in May 2023, repurchasing **382,017 shares** for **$5.0 million** during Q2 2023, with **$63.4 million** remaining under authorization[133](index=133&type=chunk)[134](index=134&type=chunk) [Cash Flows](index=33&type=section&id=Cash%20Flows) Provides a summary of cash flows from operating, investing, and financing activities Summary of Cash Flows (in thousands) | (in thousands) | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $18,225 | $36,439 | $(18,214) | | Net cash used in investing activities | $(98) | $(15,624) | $15,526 | | Net cash provided by (used in) financing activities | $(20,086) | $15,455 | $(35,541) | | Net change in cash and cash equivalents, and restricted cash | $(1,959) | $36,264 | $(38,223) | [Operating Cash Flows](index=33&type=section&id=Operating%20Cash%20Flows) Analyzes changes in net cash provided by operating activities and their underlying causes - Net cash provided by operating activities decreased by **$18.2 million to $18.2 million** for the twenty-eight weeks ended July 9, 2023, primarily due to an income tax refund received in 2022, and severance and higher interest payments in 2023[122](index=122&type=chunk) [Investing Cash Flows](index=33&type=section&id=Investing%20Cash%20Flows) Details changes in net cash used in investing activities, including capital expenditures and asset sales - Net cash used in investing activities decreased by **$15.5 million to $0.1 million** for the twenty-eight weeks ended July 9, 2023, mainly due to proceeds from real estate sales, partially offset by increased Donatos installations, restaurant improvements, and the acquisition of **five franchised restaurants**[123](index=123&type=chunk) Capital Expenditures (in thousands) | (in thousands) | Twenty-Eight Weeks Ended July 9, 2023 | Twenty-Eight Weeks Ended July 10, 2022 | | :--- | :--- | :--- | | Restaurant improvement capital and other | $12,045 | $7,379 | | Donatos® expansion | $7,440 | $2,872 | | Technology, infrastructure, and other | $5,066 | $4,877 | | New restaurants and restaurant refreshes | $1,263 | $765 | | Total capital expenditures | $25,814 | $15,893 | [Financing Cash Flows](index=33&type=section&id=Financing%20Cash%20Flows) Explains shifts in net cash provided by or used in financing activities, primarily debt and share repurchases - Net cash used in financing activities was **$20.1 million** for the twenty-eight weeks ended July 9, 2023, a significant shift from **$15.5 million provided** in the prior year, primarily due to debt repayment from sale-leaseback proceeds and standard principal payments[124](index=124&type=chunk)[125](index=125&type=chunk) [Credit Facility](index=33&type=section&id=Credit%20Facility) Outlines the company's credit facility, outstanding borrowings, and available borrowing capacity - As of July 9, 2023, the Company had **$190.1 million** in outstanding borrowings under its Credit Facility (net of unamortized deferred financing charges and discounts) and **$25.0 million** of available borrowing capacity[127](index=127&type=chunk) [Covenants](index=34&type=section&id=Covenants) Confirms the company's compliance with debt covenants and lists key restrictions - The Company was in compliance with all debt covenants under its Credit Facility as of July 9, 2023, which include limitations on borrowings, acquisitions, stock repurchases, asset sales, dividend payments, and a Total Net Leverage ratio covenant[129](index=129&type=chunk) [Debt Outstanding](index=34&type=section&id=Debt%20Outstanding) Details total debt outstanding and its changes over the reporting period - Total debt outstanding decreased by **$16.5 million to $198.4 million** at July 9, 2023, from **$214.9 million** at December 25, 2022, primarily due to long-term debt payments[130](index=130&type=chunk) [Working Capital](index=34&type=section&id=Working%20Capital) Discusses the company's working capital position and its sufficiency for future operations - The Company typically operates with a working capital deficit due to rapid inventory turnover and cash receipts preceding payable due dates, but believes future operating cash flows and credit facility capacity will be sufficient to cover deficits and capital expenditures[131](index=131&type=chunk) [Share Repurchase](index=34&type=section&id=Share%20Repurchase) Provides details on the company's share repurchase program, including activity and remaining authorization - The Company resumed its **$75 million share repurchase program** in May 2023, repurchasing **382,017 shares** for **$5.0 million** during Q2 2023[133](index=133&type=chunk) - As of July 9, 2023, **$63.4 million** remained available under the current share repurchase program[134](index=134&type=chunk) [Seasonality](index=34&type=section&id=Seasonality) Describes seasonal fluctuations affecting the company's business and operating results - The Company's business is subject to seasonal fluctuations, with historically higher sales during summer and winter holidays and lower sales in the fall, leading to potential quarterly operating result variations[135](index=135&type=chunk) [Contractual Obligations](index=34&type=section&id=Contractual%20Obligations) Outlines the company's current purchase obligations for food, beverage, and other supplies - As of July 9, 2023, the Company had **$132.1 million** in current purchase obligations for system-wide fixed price commitments for food, beverage, equipment, and restaurant supplies, with **$19.4 million** due in 2023[136](index=136&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Confirms no significant changes to critical accounting policies and estimates from the prior annual report - There were no significant changes in the Company's critical accounting policies and estimates from those disclosed in its 2022 Annual Report on Form 10-K[137](index=137&type=chunk) [Recently Issued and Recently Adopted Accounting Standards](index=35&type=section&id=Recently%20Issued%20and%20Recently%20Adopted%20Accounting%20Standards) Notes the absence of recently issued or adopted accounting standards impacting the company - No recently issued or adopted accounting standards were noted in the report[138](index=138&type=chunk) [Forward-Looking Statements](index=35&type=section&id=Forward-Looking%20Statements) Identifies forward-looking statements within the report and highlights associated risks and uncertainties - The report contains forward-looking statements regarding business objectives, strategic plans, working capital, share repurchase programs, restaurant operating costs, capital investments (including Donatos® partnership), liquidity, seasonality, litigation, interest rates, commodity prices, and sale-leaseback transactions[139](index=139&type=chunk) - These statements are subject to known and unknown risks and uncertainties, including the effectiveness of strategic initiatives, economic conditions, changes in consumer spending, cost fluctuations, capital availability, regulatory impacts, and legal claims[140](index=140&type=chunk)[141](index=141&type=chunk)[144](index=144&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses exposure to interest rate and commodity price risks, quantifying potential impacts and noting no material changes - There has been no material change in interest rate risk or commodity price risk since the 2022 Form 10-K filing[145](index=145&type=chunk) - As of July 9, 2023, **$197.5 million** of borrowings were subject to variable interest rates; a **1.0% change** in the effective interest rate would result in a **$2.0 million** pre-tax interest expense fluctuation annually[146](index=146&type=chunk) - A **1.0% increase** in food and beverage costs would negatively impact cost of sales by approximately **$3.2 million** on an annualized basis, given the Company's dependence on key commodities like ground beef, poultry, and potatoes[147](index=147&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - The Company's CEO and CFO concluded that disclosure controls and procedures were effective as of July 9, 2023[148](index=148&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[149](index=149&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=37&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Confirms the effectiveness of the company's disclosure controls and procedures as assessed by management - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by the report, providing reasonable assurance of achieving control objectives[148](index=148&type=chunk) [Changes in Internal Control Over Financial Reporting](index=37&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) States that no material changes occurred in internal control over financial reporting during the quarter - There were no changes in the Company's internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[149](index=149&type=chunk) [PART II - OTHER INFORMATION](index=38&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) Provides additional information on legal proceedings, risk factors, equity sales, and an immaterial correction to prior period financial statements [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 8 for details on legal proceedings and contingencies, emphasizing litigation unpredictability and loss assessment - The Company reviews and assesses litigation contingencies quarterly, making provisions for potential losses, and believes adequate provision has been made in the financial statements[152](index=152&type=chunk) - Further details on litigation contingencies are provided in Note 8. Commitments and Contingencies[153](index=153&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) States no material changes to risk factors previously disclosed in the 2022 Annual Report on Form 10-K - No material changes have occurred in the risk factors since the filing of the fiscal year 2022 Annual Report on Form 10-K[154](index=154&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Confirms no unregistered equity sales and details the resumed share repurchase program, including shares bought and remaining authorization - No unregistered sales of equity securities occurred during the twelve weeks ended July 9, 2023[155](index=155&type=chunk) - The Company resumed its **$75 million share repurchase program** in May 2023, repurchasing **382,017 shares** for **$5.0 million** during Q2 2023[155](index=155&type=chunk)[156](index=156&type=chunk) - As of July 9, 2023, **$63.4 million** remained available under the share repurchase program[156](index=156&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) Details the immaterial correction of prior period financial statements due to a gift card revenue recognition error - The Company corrected a multi-year error in gift card breakage revenue recognition, which had overstated total revenues in prior periods, including **$0.2 million** for the sixteen weeks ended April 16, 2023, and **$1.1 million** for the year ended December 25, 2022[157](index=157&type=chunk) - The cumulative effect of the error correction on unearned revenue was an increase of **$3.6 million** as of December 25, 2022, and increased net loss by **$1.1 million** for the year ended December 25, 2022[157](index=157&type=chunk)[161](index=161&type=chunk) [Immaterial Correction of Prior Period Financial Statements](index=39&type=section&id=Immaterial%20Correction%20of%20Prior%20Period%20Financial%20Statements) Details the correction of a multi-year error in gift card revenue recognition and its impact on financial statements - The Company discovered and corrected a multi-year error in gift card revenue recognition, primarily related to breakage revenue for bonus and discounted gift cards, which had led to an overstatement of total revenues in prior periods[157](index=157&type=chunk) Corrected Condensed Consolidated Statements of Operations and Comprehensive Loss (Sixteen Weeks Ended April 16, 2023) | (in thousands) | As Previously Reported | Adjustment | As Corrected | | :--- | :--- | :--- | :--- | | Franchise and other revenues | $11,075 | $(156) | $10,919 | | Total revenues | $417,968 | $(156) | $417,812 | | Net loss | $(3,100) | $(156) | $(3,256) | | Adjusted EBITDA | $36,080 | $(156) | $35,924 | Corrected Consolidated Balance Sheets (December 25, 2022) | (in thousands) | As Previously Reported | Adjustment | As Corrected | | :--- | :--- | :--- | :--- | | Unearned revenue | $43,358 | $3,586 | $46,944 | | Total liabilities | $826,770 | $3,586 | $830,356 | | Accumulated deficit | $(50,604) | $(3,586) | $(54,190) | | Total stockholders' equity | $5,375 | $(3,586) | $1,789 | [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including corporate documents, credit agreement amendments, and various certifications - Key exhibits include the Restated Certificate of Incorporation, Fifth Amended and Restated Bylaws, Amendment No. 1 to the Credit Agreement, and Severance Agreement for Wayne Davis[177](index=177&type=chunk) - The filing includes Rule 13a-14(a) Certifications from the CEO and CFO, Section 1350 Certifications, and XBRL formatted financial information[177](index=177&type=chunk) [Signature](index=46&type=section&id=Signature) Contains the CFO's signature, certifying the report's due authorization and filing on August 17, 2023 - The report was signed on behalf of Red Robin Gourmet Burgers, Inc. by Todd Wilson, Chief Financial Officer, on August 17, 2023[180](index=180&type=chunk)

Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) Q1 2023 Earnings Conference Call May 24, 2023 5:00 PM ET Company Participants G.J. Hart - President and Chief Executive Officer Todd Wilson - Chief Financial Officer Conference Call Participants Todd Brooks - The Benchmark Company Andrew Wolf - CL King Operator Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers Incorporated First Quarter 2023 Earnings Call. This conference is being recorded. During management's presentation and in response to ...

Financial Performance - Total revenues for the sixteen weeks ended April 16, 2023, were $418.0 million, an increase of $22.4 million or 5.6% compared to the same period in 2022[60]. - Net loss remained unchanged at $3.1 million, with a GAAP loss per diluted share of $0.19 compared to $0.20 in 2022[61][65]. - Income from operations was $4.3 million, representing 1.0% of total revenues, slightly down from 1.1% in 2022[62][69]. - Adjusted EBITDA increased by $8.1 million to $36.1 million, reflecting strong operational performance[62][67]. - Adjusted income per diluted share was $0.25, a significant improvement from an adjusted loss of $0.12 in 2022[65]. Revenue Growth - Comparable restaurant revenue increased by 8.6%, marking the ninth consecutive quarter of positive growth[62]. - Restaurant revenue for the sixteen weeks ended April 16, 2023, was $406.9 million, a 6.9% increase from $380.6 million in the same period of 2022[75]. - Comparable restaurant revenue increased by 8.6%, driven by an 8.0% rise in average guest check and a 0.6% increase in guest count[76]. - Comparable restaurant dine-in sales surged by 16.4% during the quarter[62]. Operating Costs - Total restaurant operating costs increased by 18.5% to $346.9 million, with cost of sales rising by 9.6% and labor costs by 5.3%[63]. - Cost of sales rose to $99.7 million, representing 24.5% of restaurant revenue, an increase of 60 basis points compared to the prior year[80]. - Labor costs increased to $145.4 million, accounting for 35.7% of restaurant revenue, a decrease of 60 basis points year-over-year[81]. - Other operating costs were $72.1 million, or 17.7% of restaurant revenue, a slight decrease of 10 basis points from the previous year[83]. - Occupancy costs decreased to $29.8 million, representing 7.3% of restaurant revenue, down 70 basis points compared to the same period in 2022[84]. - Depreciation and amortization expenses were $21.8 million, or 5.2% of total revenues, a decrease of 80 basis points year-over-year[86]. Capital Expenditures and Cash Flow - Net cash provided by operating activities rose by $4.0 million to $17.3 million for the sixteen weeks ended April 16, 2023[97]. - Net cash used in investing activities increased by $6.5 million to $16.1 million, primarily due to accelerated Donatos installations and restaurant improvements[98]. - Total capital expenditures for the sixteen weeks ended April 16, 2023, were $16.1 million, up from $9.7 million in the prior year[98]. Debt and Liquidity - Total debt outstanding decreased by $1.0 million to $213.9 million as of April 16, 2023[105]. - The company had $10.0 million of available borrowing capacity under its Credit Facility as of April 16, 2023[102]. - As of April 16, 2023, the company had $213.0 million of borrowings subject to variable interest rates[118]. Interest and Tax - Interest expense for the sixteen weeks ended April 16, 2023, was $7.8 million, with a weighted average interest rate of 11.6%, up from 8.2% in the prior year[91]. - Interest income increased by $0.7 million to $0.4 million for the sixteen weeks ended April 16, 2023, compared to an expense of $0.3 million in the prior year[92]. - The effective tax rate decreased to 0.6% for the sixteen weeks ended April 16, 2023, from 2.0% in the same period of 2022[93]. Share Repurchase - The company repurchased 226,500 shares at an average price of $29.14 per share for a total of $6.6 million since the program's inception[107]. Commodity Dependency - The company's restaurant menus are highly dependent on select commodities, including ground beef, poultry, and potatoes[119]. - A 1.0% increase in food and beverage costs would negatively impact cost of sales by approximately $3.2 million on an annualized basis[119]. - A 1.0% change in the effective interest rate would result in a pre-tax interest expense fluctuation of $2.1 million on an annualized basis[118].

Financial Data and Key Metrics Changes - Total revenues in Q4 2022 were approximately $290 million, an increase of $6.7 million compared to Q4 2021, driven by a 2.5% increase in comparable restaurant revenue [53] - Adjusted EBITDA for fiscal 2022 was $52.8 million, down from $63.5 million in 2021, while adjusted EBITDA for Q4 2022 remained flat at $8.9 million compared to Q4 2021 [26][53] - General and administrative costs increased to $20.2 million, up $2.5 million year-over-year, while selling expenses decreased to $14.2 million, down $1.5 million [25] Business Line Data and Key Metrics Changes - Dine-in sales mix increased to approximately 73% in Q4 2022, reflecting a sequential increase throughout the fiscal year [54] - Comparable restaurant sales growth has been positive for the past four quarters, with a 2.1% increase compared to Q4 2019 [23] Market Data and Key Metrics Changes - Commodity inflation moderated to 13% in Q4 2022, down from peaks in Q2 2022, contributing to a 170 basis point increase in cost of goods sold compared to Q4 2021 [24] - The company anticipates commodity and labor inflation in the mid-to-high single digits for 2023, with menu price increases expected to match this inflation [29] Company Strategy and Development Direction - The company introduced a 5-point plan aimed at enhancing competitive positioning, driving sustainable growth, and building long-term shareholder value [4] - A focus on operations-driven management is emphasized, with frontline operators involved in key decisions and a new compensation model to be implemented [5][12] - The company is transitioning to a flat top cooking method to improve food quality and reduce maintenance costs, with full deployment expected by mid-2023 [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to improve guest experience and operational efficiency, despite challenges from inflation and staffing [3][42] - The company aims to regain credibility with the investment community through conservative financial guidance and a commitment to delivering on financial commitments [51][58] Other Important Information - The company ended fiscal 2022 with approximately $48.8 million in cash and cash equivalents and $10 million in available borrowing capacity [27] - A partnership with the Make-A-Wish Foundation was announced, committing over $3 million over the next three years [50] Q&A Session Summary Question: What are the key drivers for same-store sales in 2023? - Management highlighted staffing and guest experience as critical drivers, with expectations for improvements from reducing false waits [33][34] Question: Can you provide more details on the restaurant level operating margin guidance of 13%? - Management indicated that investments in staffing and service model changes would be phased in, with a focus on achieving stability and self-funding future investments [74][78] Question: How will the company approach product innovation? - The company plans to expedite the product innovation cycle, utilizing consumer insights and beta testing to bring new items to market more quickly [80][103]

Part I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Red Robin Gourmet Burgers, Inc. operates and franchises 511 casual dining restaurants, implementing a "North Star" strategy to enhance operations, guest experience, and profitability Restaurant Count as of December 25, 2022 | Category | Count | | :--- | :--- | | Total Restaurants | 511 | | Company-owned | 414 | | Franchised | 97 | - The company has launched a **"North Star five-point plan"** to improve its competitive position, focusing on operations, guest experience, cost/complexity reduction, guest engagement, and driving revenue and profitability[16](index=16&type=chunk)[25](index=25&type=chunk) - In 2022, burgers accounted for **61%** of food sales, with the average check per guest at **$15.99**, a **10.5% increase** from 2021[21](index=21&type=chunk)[23](index=23&type=chunk) - The company is transitioning its restaurant management structure in 2023, introducing **"Managing Partners"** and **"Market Partners"** with a compensation plan **heavily tied to restaurant-level operating profit** to drive local ownership and community engagement[28](index=28&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - The partnership with Donatos® pizza has expanded to **245 restaurants**, outperforming non-Donatos® locations by **470 basis points** in comparable restaurant revenue growth in fiscal 2022[43](index=43&type=chunk) [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks from its business strategy, economic conditions, public health crises, operational challenges, financial constraints, and regulatory and litigation exposures - The success of the new "North Star" business strategy is **not guaranteed**; changes to operations, compensation, and guest experience may not achieve expected growth and could negatively affect guest satisfaction and sales[76](index=76&type=chunk)[77](index=77&type=chunk) - The COVID-19 pandemic has had and may continue to have a **material adverse effect** on operations, sales, staffing, and costs, with future public health emergencies posing similar risks[79](index=79&type=chunk) - The company has experienced **labor shortages** and **significant labor cost inflation**, which may disrupt staffing levels, increase expenses, and negatively impact the guest experience and financial results[86](index=86&type=chunk) - A **privacy or security breach** of IT systems could interrupt business, damage the company's reputation, and lead to fines, litigation, and **significant unplanned expenses**, requiring PCI Data Security Standard compliance[92](index=92&type=chunk)[93](index=93&type=chunk)[95](index=95&type=chunk) - As of December 25, 2022, **40%** of company-owned restaurants were concentrated in the Western United States, making the business susceptible to regional economic trends, regulatory changes, and natural disasters[121](index=121&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - There are no unresolved staff comments[148](index=148&type=chunk) [Item 2. Properties](index=24&type=section&id=Item%202.%20Properties) The company primarily leases its 414 company-owned restaurants, owning 36 locations, with its corporate center lease expiring in May 2025 - The company leases the **majority** of its restaurant locations, with operating leases having remaining terms from less than one year to over 15 years[149](index=149&type=chunk) - The company owns the real estate for **36** of its company-owned restaurants across 16 states[150](index=150&type=chunk) - The Restaurant Support Center is located in Englewood, Colorado, under a lease that expires on **May 31, 2025**[151](index=151&type=chunk) [Item 3. Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 12, "Commitments and Contingencies," within Item 8 of the financial statements - Details on legal proceedings are available in Note 12 of the Financial Statements and Supplementary Data[153](index=153&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[154](index=154&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq (RRGB); no dividends or share repurchases occurred in 2022, with future cash flow prioritized for debt and strategic initiatives - The company's common stock is listed on The **Nasdaq Global Select Market** under the symbol **RRGB**[157](index=157&type=chunk) - **No cash dividends** were declared or paid in 2022, 2021, or 2020, with future cash flow anticipated for debt service, restaurant maintenance, and long-term business strategy[158](index=158&type=chunk) - **No share repurchases** were made in 2022, as the company's ability to repurchase shares is limited by conditions in its Credit Facility[160](index=160&type=chunk) [Item 6. Reserved](index=27&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2022, total revenues grew 9.0% to $1.27 billion, but the company reported a net loss of $77.8 million, impacted by commodity inflation and decreased Adjusted EBITDA Fiscal Year 2022 Financial Highlights vs. 2021 | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1.27 billion | $1.16 billion | +9.0% | | Comparable Restaurant Revenue | N/A | N/A | +9.2% | | Net Loss | ($77.8 million) | ($50.0 million) | Increased Loss | | Loss per Diluted Share | ($4.91) | ($3.19) | Increased Loss | | Adjusted Loss per Diluted Share | ($3.26) | ($2.43) | Increased Loss | | Adjusted EBITDA | $52.8 million | $63.5 million | -16.9% | Restaurant Operating Costs as a % of Restaurant Revenue | Cost Category | 2022 | 2021 | Basis Point Change | | :--- | :--- | :--- | :--- | | Cost of sales | 24.9% | 22.9% | +200 bps | | Labor | 35.8% | 36.0% | -20 bps | | Other operating | 18.3% | 18.3% | 0 bps | | Occupancy | 8.0% | 8.5% | -50 bps | | **Total** | **87.0%** | **85.7%** | **+130 bps** | - The **9.2% increase** in comparable restaurant revenue was driven by a **10.1% increase** in average guest check, offsetting a **0.9% decrease** in guest count, due to a **6.4% increase** in pricing and a **3.8% increase** in menu mix[186](index=186&type=chunk) - Cost of sales increased by **200 basis points**, primarily due to approximately **15.3% commodity basket inflation**, partially offset by menu price increases[190](index=190&type=chunk) Summary of Cash Flows (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $35,532 | $47,292 | | Net cash used in investing activities | ($29,568) | ($42,241) | | Net cash provided by financing activities | $29,533 | $1,563 | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate fluctuations on $214.0 million variable-rate debt and commodity price volatility, mitigating the latter with 49% fixed-price contracts - The company has **$214.0 million** of variable-rate debt, where a **1.0%** change in the effective interest rate would result in an annualized pre-tax interest expense fluctuation of **$2.1 million**[231](index=231&type=chunk) - The company is exposed to commodity price volatility for key items, where a **1.0% increase** in food and beverage costs would negatively impact cost of sales by approximately **$3.1 million** annually[233](index=233&type=chunk) - As of December 25, 2022, approximately **49%** of the company's estimated annual food and beverage purchases were covered by fixed-price contracts, mostly expiring through the end of 2023[234](index=234&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=43&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section provides audited consolidated financial statements for fiscal 2022, including balance sheets, income statements, cash flows, and notes, with total assets at $832.1 million and liabilities at $826.8 million Consolidated Balance Sheet Summary (in thousands) | | Dec 25, 2022 | Dec 26, 2021 | | :--- | :--- | :--- | | Total Current Assets | $119,580 | $102,156 | | Total Assets | $832,145 | $928,998 | | Total Current Liabilities | $216,627 | $223,300 | | Total Liabilities | $826,770 | $852,024 | | Total Stockholders' Equity | $5,375 | $76,974 | Consolidated Statement of Operations Summary (in thousands) | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Revenues | $1,266,617 | $1,162,078 | $868,715 | | Loss from Operations | ($56,414) | ($36,697) | ($275,146) | | Net Loss | ($77,800) | ($50,002) | ($276,068) | | Loss per Share (Diluted) | ($4.91) | ($3.19) | ($19.29) | - The company recognized a change in accounting estimate for gift card breakage, resulting in an additional **$5.9 million** in Other revenues and a net decrease to net loss of **$5.2 million** in fiscal 2022[271](index=271&type=chunk) - In 2022, the company recorded asset impairment charges of **$38.5 million**, primarily related to **46** underperforming restaurant locations and certain liquor licenses[318](index=318&type=chunk)[319](index=319&type=chunk) - On March 4, 2022, the company replaced its prior credit agreement with a new five-year, **$225.0 million** facility, consisting of a **$25.0 million** revolving line of credit and a **$200.0 million** term loan[341](index=341&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=73&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[401](index=401&type=chunk) [Item 9A. Controls and Procedures](index=73&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 25, 2022, with no material changes during the quarter - Based on an evaluation as of December 25, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures are **effective**[402](index=402&type=chunk) - Management assessed the company's internal control over financial reporting using the COSO framework and concluded that it was **effective** as of December 25, 2022[405](index=405&type=chunk) - There were **no changes** in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[403](index=403&type=chunk) [Item 9B. Other Information](index=75&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[419](index=419&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=75&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company reports no information for this item, indicating it is not applicable - None[420](index=420&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=75&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement - Required information for this item is incorporated by reference from the 2023 Proxy Statement[423](index=423&type=chunk) [Item 11. Executive Compensation](index=75&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2023 Proxy Statement - Required information for this item is incorporated by reference from the 2023 Proxy Statement[424](index=424&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=75&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and related stockholder matters is incorporated by reference from the 2023 Proxy Statement - Required information for this item is incorporated by reference from the 2023 Proxy Statement[425](index=425&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=75&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2023 Proxy Statement - Required information for this item is incorporated by reference from the 2023 Proxy Statement[426](index=426&type=chunk) [Item 14. Principal Accounting Fees and Services](index=75&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the 2023 Proxy Statement - Required information for this item is incorporated by reference from the 2023 Proxy Statement[427](index=427&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=76&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists exhibits and financial statement schedules filed with the Form 10-K, including governance documents, material contracts, and certifications - This item contains an index of all exhibits filed with the Form 10-K, including governance documents, material contracts, and certifications[430](index=430&type=chunk) [Item 16. Form 10-K Summary](index=78&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no information for this item - None[434](index=434&type=chunk)