Red Robin Gourmet Burgers, Inc. · NASDAQ:RRGB

Red Robin Gourmet Burgers — Q1 2018 Earnings Presentation

25 slides from Red Robin Gourmet Burgers's earnings presentation, May 22, 2018

  1. Slide 1: First Quarter 2018 Results

    CLASSIFIED – INTERNAL USE May 22, 2018 First Quarter 2018 Results

  2. Slide 2: Forward-Looking Statements

    CLASSIFIED – INTERNAL USE 2 Forward-Looking Statements Forward-looking statements in this presentation regarding the Company’s future performance, restaurant sales and guest traffic, new restaurant openings, and all other statements that are not historical facts, are made under the safe harbor provi

  3. Slide 3: Red Robin Q1-2018 Results

    CLASSIFIED – INTERNAL USE 3 Red Robin Q1-2018 Results • Total revenues increased 0.2% • Off-premise sales increased to 9.4% of total food and beverage sales • Comparable restaurant revenue decreased 0.9% (using constant currency rates) • Comparable restaurant guest counts increased 0.1% • Restaurant

  4. Slide 4: Expanding Everyday Value Line-up

    CLASSIFIED – INTERNAL USE 4 Expanding Everyday Value Line-up Red Robin’s Tavern Double Offerings

  5. Slide 5: Continued Off-Premise Sales Growth

    CLASSIFIED – INTERNAL USE 5 Continued Off-Premise Sales Growth US Comp Locations Off-Premise Sales as a % of Gross F&B Sales 10.0% 9.4% 9.0% 8.3% 8.0% 7.6% 7.0% 7.0% 6.3% 6.0% 5.7% 5.4% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18

  6. Slide 6: Burger Bar Advertising in Test

    CLASSIFIED – INTERNAL USE 6 Burger Bar Advertising in Test

  7. Slide 7: Red Robin Value vs. "Those Guys"

    CLASSIFIED – INTERNAL USE 7 Red Robin Value vs. “Those Guys”

  8. Slide 8: Significant Productivity Improvement

    CLASSIFIED – INTERNAL USE 8 Significant Productivity Improvement US Comp Locations’ Labor Productivity Improvement Year-Over-Year 12.0% 10.9% 10.0% 8.0% 6.3% 6.0% 4.0% 2.4% 2.0% 1.6% 0.0% -0.8% -2.0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18

  9. Slide 9: Emphasizing What We Are Known For

    CLASSIFIED – INTERNAL USE 9 Emphasizing What We Are Known For • Craveable, customizable burgers • Attentive service at speed appropriate for Guest occasion • Affordable abundance

  10. Slide 10: Financial Update

    CLASSIFIED – INTERNAL USE 10 Financial Update

  11. Slide 11: Seven Consecutive Quarters of Traffic Outperformance vs. Competitors

    CLASSIFIED – INTERNAL USE 11 Seven Consecutive Quarters of Traffic Outperformance vs. Competitors 5.0% 4.0% 4.0% 3.6% 3.6% 3.0% 2.2% 2.3% 2.0% 1.2% 1.2% 1.0% 0.0% -1.0% -0.6% -0.9% -2.0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Source: Based on Black Box Intelligence Casual Dining (All Cuisine)

  12. Slide 12: Q1-18 Sales Highlights

    CLASSIFIED – INTERNAL USE 12 Q1-18 Sales Highlights Q1-18 Q1-17 Change (16 Weeks) (16 Weeks) Restaurant revenue (millions) $414.7 $413.5 0.3% Total company revenues (millions) $421.5 $420.6 0.2% Company-owned comp revenue(1)(2) -0.9% -1.2% Price/Mix -1.0% 0.5% Guest counts 0.1% -1.7% Franchised comp

  13. Slide 13: Comparable Restaurant Revenue Trend

    CLASSIFIED – INTERNAL USE 13 Comparable Restaurant Revenue Trend(1) 5.5% 3.5% 2.7% 1.5% 0.5% -0.5% -0.1% -0.9% -1.2% -2.5% -2.6% -3.2% -3.6% -4.5% -4.3% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 (1) Calculated at constant currency rates

  14. Slide 14: Q1-18 Restaurant Results

    CLASSIFIED – INTERNAL USE 14 Q1-18 Restaurant Results % of Restaurant % of Restaurant Favorable Revenue Revenue (Unfavorable) Q1-18 Q1-17 Cost of sales 23.8% 22.9% (90 bps) Labor 34.5% 35.2% 70 bps Other operating 13.3% 12.6% (70 bps) Occupancy 8.4% 8.0% (40 bps) Restaurant Level Operating Profit(1)

  15. Slide 15: Restaurant Level Operating Profit Margins

    CLASSIFIED – INTERNAL USE 15 Restaurant Level Operating Profit(1)(2) 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% 19.1% 19.0% 18.6% 18.0% 17.0% 16.0% Q1 Q2 Q3 Q4 2016 2017 2018 (1) See Appendix for reconciliation of non-GAAP restaurant-level operating profit

  16. Slide 16: Adjusted EBITDA

    CLASSIFIED – INTERNAL USE 16 Adjusted EBITDA(1) ($ in millions) $55.0 $50.0 $48.9 $45.8 $45.0 $42.4 $40.0 $35.8 $35.0 $33.5 $32.3 $30.0 $29.2 $26.8 $25.5 $25.0 $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) 16

  17. Slide 17: Adjusted Earnings Per Diluted Share

    CLASSIFIED – INTERNAL USE 17 Adjusted Earnings Per Diluted Share $1.35 $1.27 $1.15 $0.95 $0.89 $0.78 $0.75 $0.75 $0.69 $0.61 $0.55 $0.38 $0.35 $0.35 $0.21 $0.15 Q1 Q2 Q3 Q4 2016 2017 2018 See Appendix for reconciliation of non-GAAP Adjusted Earnings Per Diluted Share to Earnings (Loss) Per Diluted S

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

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

  19. Slide 19: Appendix

    CLASSIFIED – INTERNAL USE 19 Appendix

  20. Slide 20: Adjusted Net Income

    CLASSIFIED – INTERNAL USE 20 Adjusted Net Income(1) ($ in millions) $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 $5.0 $4.5 $4.0 $2.7 $2.0 Q1 Q2 Q3 Q4 2016 2017 2018 (1) See Appendix for reconciliation of non-GAAP Adjusted Net Income to Net Income (Loss) 20

  21. Slide 21: Cash Flow from Operations

    CLASSIFIED – INTERNAL USE 21 Cash Flow from Operations ($ in millions) $80.0 $70.0 $70.0 $60.0 $57.0 $50.0 $42.5 $40.0 $34.7 $35.0 $30.0 $27.6 $24.6 $20.0 $16.9 $10.0 $4.3 $0.0 Q1 Q2 Q3 Q4 2016 2017 2018 21

  22. Slide 22: Q1-18 Commodity Update

    CLASSIFIED – INTERNAL USE 22 Q1-18 Commodity Update % of Total Market vs. Contract COGS in Q1-18 Steak fries 13.5% 100% contracted through 10/19 Ground beef 13.0% Market Poultry 9.4% 100% contracted though 12/18 Bacon 100% contracted through 6/18; Meat 7.4% Prime rib 100% contracted through 12/18 Pr

  23. Slide 23: Reconciliation of Adjusted Net Income to Net Income (Loss) and Adjusted EPS

    CLASSIFIED – INTERNAL USE 23 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 Net income (loss) as reported $ 14,225 $ 7,552 $ (1,3

  24. Slide 24: Restaurant Level Operating Profit Reconciliation to Income from Operations and Net Income

    CLASSIFIED – INTERNAL USE 24 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 Restaurant revenue $ 396,770 $ 302,117 $ 293,858 $ 287,924 $ 413,451 $ 312,351 $ 301,100 $ 338,154 $ 414,702 Restau

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

    CLASSIFIED – INTERNAL USE 25 EBITDA and Adjusted EBITDA Reconciliation to Net Income (Loss) ($ in thousands) 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Net income (loss) as reported $14,225 $ 7,552 $ (1,300) $ (8,752) $ 11,567 $ 6,931 $ 2,714 $ 8,807 $ 4,380 Adjustments to net income (loss): Income t

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