Red Robin Gourmet Burgers, Inc. · NASDAQ:RRGB
Red Robin Gourmet Burgers — Q4 2018 Earnings Presentation
26 slides from Red Robin Gourmet Burgers's earnings presentation, Feb 26, 2019
Slide 1: Fourth Quarter 2018 Results
Fourth Quarter 2018 Results February 26, 2019 CLASSIFIED – INTERNAL USE ONLY
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-looking statements in this presentation regarding the Company’s future performance, sales and guest traffic, costs, net income, EBITDA, earnings per share, restaurant openings and closures, capital expenditures, and statements under the heading “Outlook for 2019”,
Slide 3: Red Robin Q4-2018 Results
Red Robin Q4-2018 Results • Total revenues decreased 10.8%. Excluding the impact of the extra week in 2017, total revenues decreased 3.7%. • Off-premise sales increased to 10.6% of total food and beverage sales • Comparable restaurant revenue decreased 4.5% (using constant currency rates) • Comparab
Slide 4: Key Strategies for Regaining Momentum
Key Strategies for Regaining Momentum Our 2019 Priorities: • Stabilizing dine-in revenue by reinforcing Red Robin’s compelling Value proposition • Continue building To-Go and Catering business • Improving Guest experience and recapturing Red Robin’s known-for “Gift of Time” convenience • Implementin
Slide 5: Making Progress on Strengthening Performance
Making Progress on Strengthening Performance • Grew catering and off-premise business substantially while working to stabilize dine-in business • Refined value offerings with adjusted Tavern Double line-up, introduced $10 bundle for dine-in Guests • Developed new advertising campaign to refresh bran
Slide 6: Moving With Urgency to Improve Performance
Moving With Urgency to Improve Performance • Refining Operations • Refreshing Marketing • Driving dine-in while growing off- premise • Making the right investments for the short-and long-term Focused on achieving stronger, sustainable results
Slide 7: Significant Productivity Improvement
Significant Productivity Improvement US Comp Locations Labor Productivity Improvement Year over Year 14.0% 11.8% 12.0% 10.9% 10.0% 8.0% 8.0% 6.3% 6.0% 4.0% 3.6% 2.4% 2.0% 1.6% 0.0% -0.8% -2.0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18
Slide 8: Making Progress on Operations Improvements
Making Progress on Operations Improvements • Efforts to date gained traction as Q4 progressed • Reductions in number of Guest walk-aways • Declines in wait times and related Guest complaints • Improvements in kitchen-time-to-table • 2019 efforts focused in five areas: • Staffing • Scheduling • Simpl
Slide 9: Financial Update
Financial Update
Slide 10: Q4-18 Sales Highlights
Q4-18 Sales Highlights Q4-18 Q4-17 Q4-18 YTD Q4-17 YTD Change Change (12 Weeks) (13 Weeks) (52 Weeks) (53 Weeks) Restaurant revenue $300.9 million $338.2 million -11.0% $1.32 billion $1.37 billion -3.6% Total company revenues $306.8 million $343.9 million -10.8% $1.34 billion $1.39 billion -3.5% Com
Slide 11: Comparable Restaurant Revenue Trend
Comparable Restaurant Revenue Trend(1) 5.0% 3.0% 2.7% 1.0% 0.5% -0.1% -1.0% -0.9% -1.2% -3.0% -2.6% -2.6% -3.2% -3.4% -3.6% -4.3% -5.0% -4.5% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 (1) Calculated at constant currency rates
Slide 12: Two Year Traffic Outperformance vs. Competition
Two Year Traffic Outperformance vs. Competition 7.0% 6.0% 5.8% 5.2% 5.2% 5.0% 4.0% 3.5% 3.0% 3.0% 2.5% 2.0% 1.0% 0.3% 0.2% 0.0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 12/30/2018
Slide 13: Restaurant Level Operating Profit Margins
(1)(2) Restaurant Level Operating Profit Margins 25.0% 24.0% 23.0% 22.8% 22.0% 21.3% 21.4% 21.0% 20.8% 20.5% 20.0% 20.0% 19.8% 19.4% 19.3% 19.1% 19.0% 18.6% 18.0% 17.0% 16.8% 16.0% Q1 Q2 Q3 Q4 2016 2017 2018 (1) See Appendix for reconciliation of non-GAAP restaurant-level operating profit to net inc
Slide 14: Q4-18 Restaurant Results
Q4-18 Restaurant Results % of Restaurant % of Restaurant Revenue Revenue Favorable Q4-18 Q4-17 (Unfavorable) Cost of sales 23.6% 23.7% 10 bps Labor 34.7% 34.1% (60 bps) Other operating 13.6% 13.2% (40 bps) Occupancy 8.7% 8.5% (20 bps) Restaurant Level Operating Profit(1) 19.4% 20.5% (110 bps) (1) Se
Slide 15: Adjusted EBITDA
Adjusted EBITDA(1) $55.0 $50.0 $48.9 $45.8 $45.0 $42.4 $40.0 $35.8 $35.0 $33.5 $32.3 $29.2 $30.0 $28.8 $28.4 $26.8 $25.5 $25.0 $24.2 $20.0 $15.0 $10.0 Q1 Q2 Q3 Q4 2016 2017 2018 (1) See Appendix for reconciliation of non-GAAP Adjusted EBITDA to Net Income (Loss)
Slide 16: Adjusted Earnings Per Diluted Share
Adjusted Earnings Per Diluted Share $1.40 $1.27 $1.20 $1.00 $0.89 $0.80 $0.75 $0.78 $0.69 $0.61 $0.60 $0.46 $0.43 $0.38 $0.40 $0.35 $0.21 $0.20 $0.16 $0.00 Q1 Q2 Q3 Q4 2016 2017 2018 See Appendix for reconciliation of non-GAAP Adjusted Earnings Per Diluted Share to Earnings (Loss) Per Diluted Share
Slide 17: Outlook for 2019
Outlook for 2019 • Comparable restaurant revenue flat to growth of 1.5% • Selling, general and administrative costs of $160 million to $164 million • Net income of $17 million to $22 million • EBITDA of $121 million to $126 million • Diluted EPS of $1.30 to $1.70 • Capital expenditures between $50 m
Slide 18: In Closing
In Closing
Slide 19: Appendix
Appendix
Slide 20: Continued Off-Premise Sales Growth
Continued Off-Premise Sales Growth US Comp Locations Off-Premise Sales as a % of Gross F&B Sales 12.0% 10.6% 10.1% 10.0% 9.4% 9.6% 8.3% 8.0% 7.6% 7.0% 6.3% 5.7% 6.0% 5.4% 4.0% 2.0% 0.0% Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18
Slide 21: Adjusted Net Income
Adjusted Net Income(1) ($ in Millions) $20.0 $18.0 $17.6 $16.0 $14.0 $12.0 $11.6 $10.3 $10.2 $10.0 $9.1 $7.9 $8.0 $6.0 $6.0 $5.4 $5.0 $4.5 $4.0 $2.7 $2.1 $2.0 $0.0 Q1 Q2 Q3 Q4 2016 2017 2018 (1) See Appendix for reconciliation of non-GAAP Adjusted Net Income to Net Income (Loss)
Slide 22: Cash Flow from Operations
Cash Flow from Operations ($ in Millions) $80.0 $70.0 $70.0 $60.0 $57.0 $50.0 $42.5 $40.0 $37.5 $34.7 $35.0 $30.0 $27.6 $24.6 $20.0 $20.0 $16.9 $11.8 $10.0 $4.3 $0.0 Q1 Q2 Q3 Q4 2016 2017 2018
Slide 23: Q4-18 Commodity Update
Q4-18 Commodity Update % of Total Market vs. Contract COGS in Q4-18 Ground beef 11.1% Market Steak fries 14.1% 100% contracted through 10/19 Poultry 9.0% 100% contracted though 1/20 Produce 7.9% 70% contracted through 10/19 Prime rib and bacon 100% contracted through 6/19 Meat 7.5% and 2/19 Bread 6.
Slide 24: Reconciliation of Adjusted Net Income to Net Income (Loss)
Reconciliation of Adjusted Net Income to Net Income (Loss) and Adjusted Earnings Per Diluted Share to Earnings (Loss) Per Diluted Share ($ in thousands, except per share data) 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net income (loss) as reported $ 14,225 $ 7,552 $ (1,300) $ (8,752) $ 11,5
Slide 25: Restaurant Level Operating Profit Reconciliation
Restaurant Level Operating Profit Reconciliation to Income from Operations and Net Income (Loss) ($ in thousands) 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Restaurant revenue $ 396,770 $ 302,117 $ 293,858 $ 287,924 $ 413,451 $ 312,351 $ 301,100 $ 338,154 $ 414,702 $ 310,392 $290,218 $300,89
Slide 26: EBITDA and Adjusted EBITDA Reconciliation to Net Income (Loss)
EBITDA and Adjusted EBITDA Reconciliation to Net Income (Loss) ($ in thousands) 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net income (loss) as reported $ 14,225 $ 7,552 $ (1,300) $ (8,752) $ 11,567 $ 6,931 $ 2,714 $ 8,807 $ 4,380 $ (1,874) $ 1,709 $ (10,634) Adjustments to net income (loss)
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