Red Robin Gourmet Burgers, Inc. · NASDAQ:RRGB
Red Robin Gourmet Burgers — Q2 2016 Earnings Presentation
33 slides from Red Robin Gourmet Burgers's earnings presentation, Aug 8, 2016
Slide 1: Second Quarter 2016 Results
CLASSIFIED – INTERNAL USE Second Quarter 2016 Results August 8, 2016
Slide 2: Forward-Looking Statements
2 CLASSIFIED – INTERNAL USE Forward - Looking Statements Forward - looking statements in this presentation regarding our strategic initiatives, future performance, revenues, EBITDA, capital investments, anticipated number and timing of new restaurant openings (including Red Robin Burger Works), the
Slide 3: 3 CLASSIFIED – INTERNAL USE
3 CLASSIFIED – INTERNAL USE
Slide 4: We are the Burger Authority!
4 CLASSIFIED – INTERNAL USE We are the Burger Authority!
Slide 5: Areas for Improvement
5 CLASSIFIED – INTERNAL USE Areas for Improvement Faster Experience • Improving speed - to - table, total dine time • Implementing KDS and table management Better Value • Quality, quantity and price • Highlighting everyday value • Special offers for Red Robin Royalty members Increase Top of Mind • M
Slide 6: Foundation Set – Moving Forward!
6 CLASSIFIED – INTERNAL USE Foundation Set – Moving Forward!
Slide 7: Financial Update
CLASSIFIED – INTERNAL USE 7 Financial Update
Slide 8: Red Robin Q2-2016 Results
8 CLASSIFIED – INTERNAL USE Red Robin Q2 - 2016 Results • Total revenues increased 4.3% • Comparable restaurant revenue was down 3.2%, at constant currency rates • Restaurant - level operating (1) profit was 20.9% compared to 22.5% in prior year • Adjusted EBITDA (1) was $34.5 million, a decrease of
Slide 9: Adjusted Earnings Per Diluted Share
9 CLASSIFIED – INTERNAL USE Adjusted Earnings Per Diluted Share (1) $0.82 $0.68 $0.50 $0.66 $1.10 $0.78 $0.58 $0.86 $1.27 $0.75 $0.15 $0.35 $0.55 $0.75 $0.95 $1.15 $1.35 Q1 Q2 Q3 Q4 2014 2015 2016 9 (1) See appendix for reconciliation of non - GAAP Adjusted Earnings Per Diluted Share to Earnings Per
Slide 10: Comparable Restaurant Revenue Trend
10 CLASSIFIED – INTERNAL USE Comparable Restaurant Revenue Trend (1) 5.4% 1.2% 0.9% 3.6% 3.1% 2.9% 3.5% - 2.0% - 2.6% - 3.2% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 (1) Calculated at constant currency rates.
Slide 11: Market Share – Year Over Year: Traffic Performance vs. Industry
11 CLASSIFIED – INTERNAL USE Market Share – Year Over Year 2.4% 1.7% 1.1% - 0.8% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 2013 2014 2015 2016 Traffic Performance vs. Industry Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of July 10, 2016 YTD
Slide 12: Market Share – Year Over Year: Sales Performance vs. Industry
12 CLASSIFIED – INTERNAL USE Market Share – Year Over Year 4.9% 3.2% 1.2% - 1.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 2013 2014 2015 2016 Sales Performance vs. Industry Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of July 10, 2016 YTD
Slide 13: Q2 Sales Highlights
13 CLASSIFIED – INTERNAL USE Q2 - 16 Sales Highlights Q2 - 16 (12 Weeks) Q2 - 15 (12 Weeks) Change Q2 - 16 YTD (28 Weeks) Q2 - 15 YTD (28 Weeks) Change Restaurant revenue $302.1 million $288.7 million 4.6% $698.9 million $677.2 million 3.2% Total company revenues $305.5 million $293.0 million 4.3% $
Slide 14: Restaurant Level Operating Profit Margins
14 CLASSIFIED – INTERNAL USE 22.4% 22.2% 19.5% 21.3% 23.0% 22.5% 21.6% 21.9% 22.5% 20.9% 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% 22.0% 23.0% 24.0% 25.0% Q1 Q2 Q3 Q4 2014 2015 2016 Restaurant Level Operating Profit (1) Margins 14 (1) See reconciliation of non - GAAP restaurant - level operating profit to
Slide 15: Adjusted EBITDA
15 CLASSIFIED – INTERNAL USE $37.0 $29.3 $25.6 $31.1 $47.0 $35.0 $31.2 $35.0 $51.0 $34.5 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 $55.0 Q1 Q2 Q3 Q4 2014 2015 2016 9.3% Growth Trailing 4 Quarters Q2 2016 $151.6M Q2 2015 $138.7M Adjusted EBITDA (1) ($ in millions) 15 (1) See appendix for
Slide 16: 2016 Outlook
16 CLASSIFIED – INTERNAL USE 2016 Outlook • Total revenue growth around 5.0% • Comparable restaurant revenue growth down approximately 2.0% • Restaurant - level operating profit margin in fiscal 2016 expected to be around 21.0% • General and administrative costs expected to be between $94 million an
Slide 17: Immediate Changes
CLASSIFIED – INTERNAL USE 17 Immediate Changes
Slide 18: New Tavern Menu Offerings
18 CLASSIFIED – INTERNAL USE New Tavern Menu Offerings
Slide 19: Happy Hour
19 CLASSIFIED – INTERNAL USE Happy Hour
Slide 20: Red Robin Royalty 5.8 million members and growing!
20 CLASSIFIED – INTERNAL USE Red Robin Royalty 5.8 million members and growing!
Slide 21: Renewed Focus on Bottomless
21 CLASSIFIED – INTERNAL USE Renewed Focus on Bottomless
Slide 22: Improving Red Robin Service
22 CLASSIFIED – INTERNAL USE Improving Red Robin Service • Making investments in incremental labor • Improving peak - hour performance on high - volume weekend days • Already seeing improvements in Guest Voice ratings and peak - hour volumes • KDS rollout complete end of August
Slide 23: Improved Marketing
23 CLASSIFIED – INTERNAL USE Improved Marketing
Slide 24: Regaining Our Winning Edge
24 CLASSIFIED – INTERNAL USE Regaining Our Winning Edge 24
Slide 25: Thank you entire Red Robin Team!
25 CLASSIFIED – INTERNAL USE Thank you entire Red Robin Team! 17
Slide 26: Appendix
CLASSIFIED – INTERNAL USE 26 Appendix
Slide 27: Q2 Restaurant Results
27 CLASSIFIED – INTERNAL USE Q2 - 16 Restaurant Results (1) See reconciliation of non - GAAP restaurant - level operating profit to income from operations and net income on slide 32 in Appendix 27 % of Restaurant Revenue Q2 - 16 % of Restaurant Revenue Q2 - 15 Favorable (Unfavorable) Cost of sales 2
Slide 28: Adjusted Net Income
28 CLASSIFIED – INTERNAL USE Adjusted Net Income (1) $11.9 $9.8 $7.2 $9.4 $15.6 $11.2 $8.3 $12.0 $17.6 $10.3 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 Q1 Q2 Q3 Q4 2014 2015 2016 ($ in millions) 28 (1) See reconciliation of non - GAAP Adjusted Net Income to Net Income on slide 31 in Appendix
Slide 29: Cash Flow from Operations
29 CLASSIFIED – INTERNAL USE $36.0 $20.1 $26.8 $40.7 $36.0 $31.3 $34.0 $39.6 $42.5 $24.6 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 Q1 Q2 Q3 Q4 2014 2015 2016 Cash Flow from Operations ($ in millions) 29 4.3% TTM Growth Q2 2016 $140.6M Q2 2015 $134.8M
Slide 30: Q2 Commodity Update
30 CLASSIFIED – INTERNAL USE Q2 - 16 Commodity Update 30 % of Total COGS in Q2 - 16 Market vs. Contract Ground beef 15.7% Market Poultry 11.3% 100% covered through 12/16 Steak fries 10.0% Contract through 10/16 Produce 7.2% 90% covered through 10/16 Meat 7.1% Bacon 60% contracted through 9/16; Prime
Slide 31: Reconciliation of Adjusted Net Income to Net Income and Adjusted EPS
31 CLASSIFIED – INTERNAL USE Reconciliation of Adjusted Net Income to Net Income and Adjusted Earnings Per Diluted Share to Earnings Per Diluted Share 31 2014 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net income as reported $ 11,944 $ 9,470 $ 7,208 $ 3,939 $ 16,565 $ 11,166 $ 8,282 $ 11,691 $ 14,225 $
Slide 32: Restaurant Level Operating Profit Reconciliation
32 CLASSIFIED – INTERNAL USE Restaurant Level Operating Profit Reconciliation to Income from Operations and Net Income 32 ($ in thousands) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Restaurant revenue $334,995 $251,818 $263,883 $278,439 $388,509 $288,704 $279,496 $282,189 $396,770 $302,117 Restaurant operating c
Slide 33: EBITDA and Adjusted EBITDA Reconciliation to Net Income
33 CLASSIFIED – INTERNAL USE EBITDA and Adjusted EBITDA Reconciliation to Net Income 33 2014 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net income as reported $11,944 $9,470 $7,208 $3,939 $16,565 $11,166 $8,282 $11,691 $14,225 $7,552 Adjustments to net income: Income tax expense 4,424 3,521 1,032 321 6
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