Red Robin Gourmet Burgers(RRGB) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenues for Q3 FY2024 were $274.6 million, a decrease of$2.9 million compared to Q3 FY2023[46] - Net loss for Q3 FY2024 was $18.9 million, compared to a net loss of$8.2 million in Q3 FY2023[46] - Adjusted EBITDA for Q3 FY2024 was $2.1 million, down from$6.8 million in Q3 FY2023[46] - Year-to-date total revenues for FY2024 were $963.3 million, a decrease of$30.7 million compared to the same period in FY2023[46] - Net loss for the year-to-date period of FY2024 was $37.8 million, compared to a net loss of$7.5 million in the prior year[46] - Adjusted EBITDA for the year-to-date period of FY2024 was $26.1 million, down from$58.3 million in the prior year[46] - Adjusted income per share for the twelve weeks ended October 6, 2024, was $(1.13), compared to$(0.79) for the same period in 2023[75] - Net loss for the twelve weeks ended October 6, 2024, was $18.9 million, compared to a loss of$8.2 million for the same period in 2023[77] - Adjusted EBITDA for the twelve weeks ended October 6, 2024, was $2.1 million, down from$6.8 million in the prior year[77] Revenue and Sales Trends - Comparable restaurant revenue increased by 0.6% in Q3 FY2024[46] - Comparable restaurant revenue declined by 2.6% year-to-date FY2024, excluding a deferred revenue benefit[46] - Restaurant revenue decreased by $2.5 million, or 0.9$29.7 million, or 3.0%, compared to the same period in 2023, with a 2.1% decrease in comparable restaurant revenue[57] - Dine-in sales comprised 76.5% of total food and beverage sales during the year-to-date period of 2024, compared to 74.8% in the same period in 2023[57] - Restaurant revenue for the twelve weeks ended October 6, 2024, was $270.6 million, a decrease of 0.9$273.1 million in the same period last year[72] Operating Costs and Expenses - Cost of sales as a percentage of restaurant revenue increased by 30 basis points in Q3 2024 compared to Q3 2023, driven by commodity inflation and higher discounts[58] - Labor costs increased by 3.8% in Q3 2024 compared to Q3 2023, with labor as a percentage of restaurant revenue rising by 180 basis points[60] - Other operating costs remained unchanged as a percentage of restaurant revenue in Q3 2024 compared to Q3 2023[61] - Occupancy costs as a percentage of restaurant revenue increased by 20 basis points in Q3 2024 compared to Q3 2023, primarily due to fixed rents from the sale-leaseback of 28 locations[62] - Selling, general, and administrative expenses decreased by $1.7 million, or 6.0$246.4 million, an increase of 1.5% compared to $242.7 million in the prior year[72] - Restaurant level operating profit for the twelve weeks ended October 6, 2024, was$24.2 million, a decrease of 20.4% from $30.4 million in the same period last year[72] - Restaurant level operating profit margin decreased to 9.0$15.5 million to $1.8 million for the year-to-date period of fiscal 2024 compared to$17.4 million in fiscal 2023[84] - Total capital expenditures for the forty weeks ended October 6, 2024, were $19.4 million, down from$37.1 million in the prior year[85] - As of October 6, 2024, the company had approximately $42.0 million in liquidity, including cash and cash equivalents and available borrowing capacity[82] - Net cash used in financing activities decreased to$8.0 million for the year-to-date period of fiscal 2024, compared to $33.7 million in the prior year[86] - Net cash flows provided by investing activities decreased to$4.9 million for the year-to-date period of fiscal 2024, down from $19.0 million in fiscal 2023[84] Debt and Financing - Outstanding borrowings under the Credit Facility as of October 6, 2024, were$180.7 million, with $20.0 million of available borrowing capacity[88] - The company entered into a second amendment to its Credit Agreement on August 21, 2024, increasing revolving commitments by$15.0 million to $40.0 million[88] - As of October 6, 2024, the company was in compliance with all debt covenants under its Credit Facility, with a maximum net total leverage ratio covenant extended through the end of Q1 2026[89] - The company operates with a working capital deficit, relying on cash or credit card sales, with future cash flows expected to meet anticipated cash requirements and fund capital expenditures over the next 12 months[90] - Interest expense for Q3 fiscal 2024 was$6.3 million, an increase from $6.1 million in Q3 fiscal 2023, primarily due to an increase in the weighted average interest rate to 14.0$23.3 million[46] - No new restaurants were opened in the year-to-date period of fiscal 2024, while one restaurant was opened and 25 Donatos locations were rolled out in the same period last year[68] - The current share repurchase program allows for up to $75.0 million in common stock repurchases, with$58.5 million available as of October 6, 2024, and no repurchases completed during the quarter[91] - The company anticipates continued investments in partnerships and restaurant improvements as part of its strategic plans[97] - Forward-looking statements indicate expectations regarding working capital, cash flows, and the effectiveness of strategic initiatives, with potential risks outlined[97] Risk Factors - The company’s business is subject to seasonal fluctuations, with historically higher sales during spring and winter holiday seasons, impacting quarterly operating results[93] - As of October 6, 2024, the company had $187.9 million in borrowings subject to variable interest rates, with a 1.0$1.9 million annually[99] - A 1.0% increase in food and beverage costs would negatively impact cost of sales by approximately $2.9 million on an annualized basis[99] - The company continues to monitor interest rate risk and may use interest rate swaps to manage exposure to interest rate changes[99] - There were no significant changes in critical accounting estimates since the last annual report, with estimates based on historical experiences and current economic conditions[95]