Red Robin Gourmet Burgers, Inc. · NASDAQ:RRGB
Red Robin Gourmet Burgers — Q4 2017 Earnings Presentation
29 slides from Red Robin Gourmet Burgers's earnings presentation, Feb 22, 2018
Slide 1: Fourth Quarter 2017 Results
CLASSIFIED – INTERNAL USE Fourth Quarter 2017 Results February 22, 2018
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
Slide 3: Our Red Robin Values
3CLASSIFIED – INTERNAL USE Our Red Robin Values
Slide 4: Red Robin Q4-2017 Results
4CLASSIFIED – INTERNAL USE Red Robin Q4-2017 Results • Total revenues increased 17.5% • Comparable restaurant revenue increased 2.7% (using constant currency rates) • Off-premise revenues increased to 8.3% of total food and beverage sales • Restaurant-level operating profit(1) was 20.5% compared to
Slide 5: Six Consecutive Quarters of Traffic Outperformance vs. Competitors
5CLASSIFIED – INTERNAL USE Six Consecutive Quarters of Traffic Outperformance vs. Competitors Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 12/31/2017 -1.5% -0.9% -0.6% 1.2% 2.2% 1.2% 3.6% 4.0% 3.6% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 4Q15 1Q16 2Q16 3Q16 4Q16
Slide 6: Traffic Outperformance Best in Years
6CLASSIFIED – INTERNAL USE Traffic Outperformance Best in 5 Years Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 12/31/2017 2.4% 1.7% 1.1% 0.3% 3.1% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 2013 2014 2015 2016 2017
Slide 7: Continued Improvement in Net Promoter Scores
7CLASSIFIED – INTERNAL USE Continued Improvement in Net Promoter Scores 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 60 62 64 66 68 70 72 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 D et rac to rs as % N et P rom o te r Sc o re Guest Voice In-Restaurant - RRGB USA NPS Score Detractors
Slide 8: Everyday Value Matters to Our Guests…
8CLASSIFIED – INTERNAL USE Everyday Value Matters to Our Guests…
Slide 9: …And We Are Making Progress
9 …And We Are Making Progress 26 31 36 41 46 51 38 40 42 44 46 48 50 52 54 56 58 In te n t to R ec o m m en d T o p B o x % Value Top Box % Major Casual Dining Chains – Value vs. Intent to Recommend Source: Technomic, 12 months ending Dec ‘17 2017 Q4 ‘15 – Q3 ’16 Baseline
Slide 10: Significant Growth in Off-Premise Sales
10CLASSIFIED – INTERNAL USE Significant Growth in Off-Premise Sales 5.4% 5.7% 6.3% 7.0% 7.6% 8.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 US Comp Locations Off-Premise Sales as a % of Gross F&B Sales
Slide 11: Our Strategic Priorities
11CLASSIFIED – INTERNAL USE Our Strategic Priorities • Maximize brand equities to ensure a strong foundation • Rapidly pilot and rollout transformational changes • Conceptualize and test revolutionary new approaches We will measure ourselves against the best in class in our business!
Slide 12: Financial Update
CLASSIFIED – INTERNAL USE 12 Financial Update
Slide 13: Comparable Restaurant Revenue Trend
13CLASSIFIED – 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% 2.7% -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 Q4-17 (1) Calculated at constant currency rates
Slide 14: Consistently Outperforming Peers On Traffic…
14CLASSIFIED – INTERNAL USE Consistently Outperforming Peers On Traffic… Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 12/31/2017 -1.5% -0.9% -0.6% 1.2% 2.2% 1.2% 3.6% 4.0% 3.6% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Slide 15: …And Outperforming Peers on Sales
15CLASSIFIED – INTERNAL USE …And Outperforming Peers on Sales Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 12/31/2017 -0.7% -1.4% -1.3% 0.0% 0.3% 1.9% 2.3% 2.1% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Slide 16: Q4-17 Sales Highlights
16CLASSIFIED – INTERNAL USE Q4-17 Sales Highlights Q4-17 (13 Weeks) Q4-16 (12 Weeks) Change Q4-17 YTD (53 Weeks) Q4-16 YTD (52 Weeks) Change Restaurant revenue (millions) $338.2 $287.9 17.4% $1,365.1 $1,280.7 6.6% Total company revenues (millions) $342.4 $291.5 17.5% $1,380.9 $1,296.4 6.5% Company-o
Slide 17: Restaurant Level Operating Profit Margins
17CLASSIFIED – INTERNAL USE 23.2% 22.6% 22.1% 22.2% 22.8% 21.4% 19.1% 19.8% 21.3% 20.8% 18.6% 20.5% 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)(2) Margins 17 (1) See Appendix for reconciliation of non-GAAP restaurant-le
Slide 18: Q4-17 Restaurant Results
18CLASSIFIED – INTERNAL USE Q4-17 Restaurant Results 18 % of Restaurant Revenue Q4-17 % of Restaurant Revenue Q4-16 Favorable (Unfavorable) Cost of sales 23.7% 22.8% (90 bps) Labor 34.1% 35.1% 100 bps Other operating 13.2% 13.7% 50 bps Occupancy 8.5% 8.7% 20 bps Restaurant Level Operating Profit(1)
Slide 19: Adjusted EBITDA
19CLASSIFIED – INTERNAL USE $45.5 $33.6 $30.0 $34.3 $48.9 $33.5 $26.8 $29.2 $45.8 $32.3 $25.5 $35.8 $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) 19 (1) See Appendix for reconciliation of non-GAAP Adjusted EBITDA to Net I
Slide 20: Adjusted Earnings Per Diluted Share
20CLASSIFIED – 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 $0.78 $0.15 $0.35 $0.55 $0.75 $0.95 $1.15 $1.35 Q1 Q2 Q3 Q4 2015 2016 2017 20 See Appendix for reconciliation of non-GAAP Adjusted Earnings Per Diluted Share to Earnings
Slide 21: Outlook for 2018
21CLASSIFIED – INTERNAL USE Outlook for 2018 • Comparable restaurant sales growth of 50 to 150 basis points, with operating weeks to decline 1% as a result of having only 52 weeks in 2018 compared to 53 weeks in 2017, offset by the impact of new unit growth in 2017 and 2018; total revenue between a
Slide 22: Thank you to all of our Team Members!
22CLASSIFIED – INTERNAL USE Thank you to all of our Team Members! 17
Slide 23: Appendix
CLASSIFIED – INTERNAL USE 23 Appendix
Slide 24: Adjusted Net Income
24CLASSIFIED – 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 $10.2 $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) 24 (1) See Appendix for reconciliation of non-GAAP Adjusted Net Income to Net Income (Los
Slide 25: Cash Flow from Operations
25CLASSIFIED – INTERNAL USE $36.0 $31.3 $34.0 $39.6 $42.5 $24.6 $27.6 $4.3 $70.0 $34.7 $16.9 $35.0 $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) 25 YTD 2017: $156.6M YTD 2016: $99.0M YTD 2015: $140.9M
Slide 26: Q4-17 Commodity Update
26CLASSIFIED – INTERNAL USE Q4-17 Commodity Update 26 % of Total COGS in Q4-17 Market vs. Contract Ground beef 13.3% Market Steak fries 11.5% 100% contracted through 10/19 Poultry 9.5% 100% contracted though 12/18 Produce 8.0% 70% contracted through 10/18 Meat 7.6% Prime rib and bacon 100% contracte
Slide 27: Reconciliation of Adjusted Net Income and Adjusted EPS
27CLASSIFIED – INTERNAL USE Reconciliation of Adjusted Net Income to Net Income (Loss) and Adjusted Earnings Per Diluted Share to Earnings (Loss) Per Diluted Share 27 ($ in thousands, except per share data) 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net income (loss) as reported $ 16,565 $ 1
Slide 28: Restaurant Level Operating Profit Reconciliation
28CLASSIFIED – 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 Q4 Restaurant revenue $ 388,509 $ 288,704 $ 279,496 $ 282,189 $ 396,770 $ 302,117 $ 293,858 $ 287,924 $ 413,45
Slide 29: EBITDA and Adjusted EBITDA Reconciliation to Net Income (Loss)
29CLASSIFIED – INTERNAL USE EBITDA and Adjusted EBITDA Reconciliation to Net Income (Loss) 29 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 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 $ 8,807 Adjustments to net inc
Red Robin Gourmet Burgers — Q4 2017 Earnings Presentation on 6ix