Red Robin Gourmet Burgers, Inc. · NASDAQ:RRGB

Red Robin Gourmet Burgers — Q3 2017 Earnings Presentation

25 slides from Red Robin Gourmet Burgers's earnings presentation, Nov 6, 2017

  1. Slide 1: Third Quarter 2017 Results

    CLASSIFIED – INTERNAL USE Third Quarter 2017 Results November 6, 2017

  2. Slide 2: Forward-Looking Statements

    2CLASSIFIED – INTERNAL USE Forward-Looking Statements Forward-looking statements in this presentation regarding the Company’s future performance, revenues and timing thereof, service model changes, new restaurant openings, tax rate, sensitivity of earnings per share and other projected financial mea

  3. Slide 3: Red Robin Q3-2017 Results

    3CLASSIFIED – INTERNAL USE Red Robin Q3-2017 Results • Total revenues increased 2.3% • Comparable restaurant revenue down 0.1% (using constant currency rates) • Off-premise revenues increased to 7.6% of total food and beverage sales • Restaurant-level operating profit(1) was 17.4% compared to 18.6%

  4. Slide 4: Red Robin Strategic Priorities

    4CLASSIFIED – INTERNAL USE Red Robin Strategic Priorities • Maximize brand equities to ensure a strong foundation • Rapidly pilot and rollout transformational changes • Conceptualize and test revolutionary new approaches

  5. Slide 5: Labor Productivity

    5CLASSIFIED – INTERNAL USE Labor Productivity _________________ *Comp restaurants only, FOH/HOH combined

  6. Slide 6: Burger Bar

    6CLASSIFIED – INTERNAL USE Burger Bar

  7. Slide 7: Off-Premise Sales Trend

    7CLASSIFIED – INTERNAL USE Off-Premise Sales Trend 5.4% 5.7% 6.3% 7.0% 7.6% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 US Comp Locations Off-Premise Sales as a % of Gross F&B Sales

  8. Slide 8: Traffic vs. Casual Dining (8-quarter trend)

    8CLASSIFIED – INTERNAL USE Traffic vs. Casual Dining (8-quarter trend) Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 10/1/2017 -1.5% -0.9% -0.6% 1.2% 2.2% 1.2% 3.6% 4.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

  9. Slide 9: Financial Update

    CLASSIFIED – INTERNAL USE 9 Financial Update

  10. Slide 10: Q3-17 Sales Highlights

    10CLASSIFIED – INTERNAL USE Q3-17 Sales Highlights Q3-17 (12 Weeks) Q3-16 (12 Weeks) Change Q3-17 YTD (40 Weeks) Q3-16 YTD (40 Weeks) Change Restaurant revenue $301.1 million $293.9 million 2.5% $1.03 billion $992.7 million 3.4% Total company revenues $304.2 million $297.3 million 2.3% $1.04 billion

  11. Slide 11: Comparable Restaurant Revenue Trend

    11CLASSIFIED – INTERNAL USE Comparable Restaurant Revenue Trend(1) 3.1% 2.9% 3.5% -2.0% -2.6% -3.2% -3.6% -4.3% -1.2% 0.5% -0.1% -4.5% -2.5% -0.5% 1.5% 3.5% 5.5% Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 (1) Calculated at constant currency rates.

  12. Slide 12: Restaurant Level Operating Profit Margins

    12CLASSIFIED – INTERNAL USE 23.0% 22.5% 21.6% 21.9% 22.5% 20.9% 18.6% 19.0% 20.7% 19.9% 17.4% 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% 22.0% 23.0% 24.0% 25.0% Q1 Q2 Q3 Q4 2015 2016 2017 Restaurant Level Operating Profit (1) Margins 12 (1) See Appendix for reconciliation of non-GAAP restaurant-level opera

  13. Slide 13: Q3-17 Restaurant Results

    13CLASSIFIED – INTERNAL USE Q3-17 Restaurant Results 13 % of Restaurant Revenue Q3-17 % of Restaurant Revenue Q3-16 Favorable (Unfavorable) Cost of sales 23.8% 23.6% (20 bps) Labor 35.3% 34.8% (50 bps) Other operating 14.9% 14.5% (40 bps) Occupancy 8.6% 8.5% (10 bps) Restaurant Level Operating Profi

  14. Slide 14: Adjusted EBITDA

    14CLASSIFIED – INTERNAL USE $45.5 $33.6 $30.0 $34.3 $48.9 $33.5 $26.8 $29.2 $45.8 $32.3 $25.5 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 $55.0 Q1 Q2 Q3 Q4 2015 2016 2017 Adjusted EBITDA(1)(2) ($ in millions) 14 (1) See Appendix for reconciliation of non-GAAP Adjusted EBITDA to Net Income

  15. Slide 15: Adjusted Earnings Per Diluted Share

    15CLASSIFIED – INTERNAL USE Adjusted Earnings Per Diluted Share $1.10 $0.78 $0.58 $0.86 $1.27 $0.75 $0.38 $0.35 $0.89 $0.61 $0.21 $0.15 $0.35 $0.55 $0.75 $0.95 $1.15 $1.35 Q1 Q2 Q3 Q4 2015 2016 2017 15 See Appendix for reconciliation of non-GAAP Adjusted Earnings Per Diluted Share to Earnings (Loss)

  16. Slide 16: Outlook for 2017

    16CLASSIFIED – INTERNAL USE Outlook for 2017 • Earnings per diluted share projected to range from $0.45 to $0.60 for the fourth quarter and range from $2.16 to $2.31 for full-year 2017. • Comparable restaurant revenue is projected to range from flat to up 0.5% for full-year 2017. Note on Guidance Po

  17. Slide 17: Our Unique, Differentiating Strengths

    17CLASSIFIED – INTERNAL USE Our Unique, Differentiating Strengths • Craveable, customizable burgers • Reputation for service and speed that meets the needs of Guests • Best-in-class value perception with Bottomless promise, “affordable abundance”

  18. Slide 18: Thank you to all of our Team Members!

    18CLASSIFIED – INTERNAL USE Thank you to all of our Team Members! 17

  19. Slide 19: Appendix

    CLASSIFIED – INTERNAL USE 19 Appendix

  20. Slide 20: Adjusted Net Income

    20CLASSIFIED – INTERNAL USE Adjusted Net Income(1) $15.6 $11.2 $8.3 $12.0 $17.6 $10.3 $5.0 $4.5 $11.6 $7.9 $2.7 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 Q1 Q2 Q3 Q4 2015 2016 2017 ($ in millions) 20 (1) See Appendix for reconciliation of non-GAAP Adjusted Net Income to Net Income (Loss)

  21. Slide 21: Cash Flow from Operations

    21CLASSIFIED – INTERNAL USE $36.0 $31.3 $34.0 $39.6 $42.5 $24.6 $27.6 $4.3 $70.0 $34.7 $16.9 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 Q1 Q2 Q3 Q4 2015 2016 2017 Cash Flow from Operations ($ in millions) 21

  22. Slide 22: Q3-17 Commodity Update

    22CLASSIFIED – INTERNAL USE Q3-17 Commodity Update 22 % of Total COGS in Q3-17 Market vs. Contract Ground beef 13.9% Market Steak fries 11.1% 100% contracted through 10/18 Poultry 9.2% 100% contracted though 12/18 Produce 8.1% 70% contracted through 10/18 Meat 8.0% Prime rib 100% through 3/18 Bread

  23. Slide 23: Reconciliation of Adjusted Net Income and Adjusted EPS

    23CLASSIFIED – INTERNAL USE Reconciliation of Adjusted Net Income to Net Income (Loss) and Adjusted Earnings Per Diluted Share to Earnings (Loss) Per Diluted Share 23 ($ in thousands, except per share data) 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net income (loss) as reported $ 16,565 $ 11,1

  24. Slide 24: Restaurant Level Operating Profit Reconciliation

    24CLASSIFIED – INTERNAL USE Restaurant Level Operating Profit Reconciliation to Income from Operations and Net Income (Loss) ($ in thousands) 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Restaurant revenue $ 388,509 $ 288,704 $ 279,496 $ 282,189 $ 396,770 $ 302,117 $ 293,858 $ 287,924 $ 413,451 $

  25. Slide 25: EBITDA and Adjusted EBITDA Reconciliation to Net Income (Loss)

    25CLASSIFIED – INTERNAL USE EBITDA and Adjusted EBITDA Reconciliation to Net Income (Loss) 25 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net income (loss) as reported $ 16,565 $ 11,166 $ 8,282 $11,691 $14,225 $ 7,552 $ (1,300) $ (8,752) $ 11,567 $ 6,931 $ 2,714 Adjustments to net income (loss):

Red Robin Gourmet Burgers — Q3 2017 Earnings Presentation on 6ix