Red Robin Gourmet Burgers, Inc. · NASDAQ:RRGB
Red Robin Gourmet Burgers — Stephens Conference June 2016
19 slides from Red Robin Gourmet Burgers's conference presentation, Jun 8, 2016
Slide 1: Red Robin Gourmet Burgers Investor Presentation, Stephens Conference June 2016
Red Robin Gourmet Burgers Investor Presentation Stephens Conference June 2016
Slide 2: Forward-looking statements
2 Forward-looking statements in this presentation regarding our strategic initiatives, the state of the industry, future performance and planned near-term business drivers, revenues, operating weeks, EBITDA, capital investments, anticipated number and timing of new restaurant openings, the anticipat
Slide 3: Recognized & Differentiated Burger Authority
3 Recognized & Differentiated Burger Authority • 540 restaurants in 44 states and 2 Canadian provinces o 443 company-owned Red Robin casual dining restaurants and 11 Burger Works fast casual restaurants o 86 franchised Red Robin casual dining • Renowned for high-quality, innovative burger creations
Slide 4: Steady Historical Growth
4 Steady Historical Growth ????????????????????????????????????????????????????????????????????????????????????????????????? ?????????? ??????????????? ? ?? ?? ?? ?? ??? ??? ??? ??? ??? ??? ????? ????? ????? ????? ????? ???? ???? ???? ???? ???? ???? ????????????????????????????? ??????? ??????? ????
Slide 5: Improving Cash Returns
5 Improving Cash Returns 12.1% 15.1% 17.0% 17.8% 18.7% 18.2% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 2010 2011 2012 2013 2014 2015 ???????????????????????????????? ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? ???
Slide 6: First Quarter 2016 Results
6 First Quarter 2016 Results • Total revenue up 1.8% with comp revenue down 2.6% (constant currency) o Comp revenue underperformed peers by 70 bps; improved sequentially o Marketing did not break through the “sea of sameness” o Marketing changes planned for 2H ’16 • Restaurant-level margins 22.5% co
Slide 7: State of the Industry
7 State of the Industry • Health of middle income consumer in question • Traffic growth and positive comp sales in casual dining remains elusive • Intense competitive discounting • Modest commodity deflation being offset by increasing labor inflation • Improving demographics with growing household f
Slide 8: Immediate Business Drivers to Take Market Share
8 Immediate Business Drivers to Take Market Share • Refresh strong everyday value proposition o Average guest check of $13.00 • Create urgency to visit with successful targeted offers o Differentiated from competition; leverage Red Robin Royalty • Build on strong guest engagement to increase frequen
Slide 9: Reinforce Compelling Value Issues
9 Reinforce Compelling Value Issues • Speed-of-service compromised • Bottomless proposition not consistently delivered • Guests want more compelling offers/deals • Tavern value tier has lacked fresh news and variety • Heavy focus on Finest tier drove sense of high prices Initiatives in Test or Imple
Slide 10: Broadening Guest Appeal and Frequency
10 Broadening Guest Appeal and Frequency • Improve service time reliability o Guests want to control their experience o Rolling out kitchen display system: improves kitchen capacity and provides performance monitoring • Prepare for expansion of To-Go • Implement more effective marketing o Local and
Slide 11: Highlight: Hispanic Initiatives
11 Highlight: Hispanic Initiatives • Fastest-growing segment of population with strong family ties and brand affiliation – untapped opportunity for Red Robin • High percentage of younger demographic • Core products and brand equities align with Hispanic guest base o Kids/families, large party sizes
Slide 12: 2016 Outlook
12 2016 Outlook • Total Revenue Growth around 8.0% o Improving traffic trends, average check and comp revenue during year with positive comp revenue by Q4 o 5%+ additional operating weeks from 2016 new unit openings and 3% from franchisee acquisition • Adjusted EBITDA expected between $150 and $155M
Slide 13: New Unit Economics
13 New Unit Economics • Opening 25 new Red Robin restaurants in 2016 • Unit Economics: o $2.2M - $2.5M build costs o $2.7M - $3.3M average volumes o 22% operating margins o Cash-on-cash of 25% - 30% and upper-teen IRRs • Growth strategy includes balance of new and existing markets • Burger Works fas
Slide 14: Near-Term Drivers to Achieve Long-Term Goal of Doubling EBITDA Over 5 Years
14 NEAR-TERM DRIVERS TO ACHIEVE LONG-TERM GOAL OF DOUBLING EBITDA OVER 5 YEARS • New Menu News Centered on Value and Innovation • Seating Utilization and Table Turns • 12+12 Brews Initiative • New promotions including Red Robin Royalty and Happy Hour news • To-Go • Hispanic Marketing • Change of Cre
Slide 15: Capital Deployment and Growing Free Cash Flow
15 • 2016 investments comprised of remodels ($33M); new units and relos ($80M); maintenance ($17M); technology ($20M) • Future restaurant openings and investments dependent on market circumstances • Allocation of future cash flow based on highest returns to shareholders Growing Free Cash Flow ? ?? ?
Slide 16: Serving Great Burgers and Delivering Results
16 Serving Great Burgers and Delivering Results • Five-year track record of increasing guest engagement and returns • Sales drivers in the pipeline • RED2 – Double EBITDA over 5 years o New unit growth o Same store sales o EBITDA Margin +200 bps • Robust multi-year plan mapped out with significant o
Slide 17: Appendix
> APPENDIX ———
Slide 18: EBITDA and Adjusted EBITDA Reconciliation to Net Income
18 EBITDA and Adjusted EBITDA Reconciliation to Net Income ?? 2014 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Net income as reported $11,944 $9,470 $ 7,208 $3,939 $16,565 $11,166 $8,282 $11,691 $14,225 Adjustments to net income: Income tax expense 4,424 3,521 1,032 321 6,220 4,410 2,325 2,577 4,312 Intere
Slide 19: Reconciliation of Adjusted Net Income to Net Income and Adjusted EPS
19 Reconciliation of Adjusted Net Income to Net Income and Adjusted Earnings Per Diluted Share to Earnings Per Diluted Share ?? 2014 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Net income as reported $11,944 $ 9,470 $ 7,208 $ 3,939 $ 16,565 $ 11,166 $ 8,282 $ 11,691 $14,225 Adjustments to net income: Litig
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