Red Robin Gourmet Burgers, Inc. · NASDAQ:RRGB
Red Robin Gourmet Burgers — Q2 2018 Earnings Presentation
23 slides from Red Robin Gourmet Burgers's earnings presentation, Aug 21, 2018
Slide 1: Second Quarter 2018 Results
Second Quarter 2018 Results August 21, 2018 CLASSIFIED – INTERNAL USE ONLY
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-looking statements in this presentation regarding the Company’s future performance, restaurant sales and guest traffic, earnings per share, new restaurant openings, and all other statements that are not historical facts, are made under the safe harbor provisions of
Slide 3: Red Robin Q2-2018 Results
Red Robin Q2-2018 Results • Total revenues decreased 0.6% • Off-premise sales increased to 9.6% of total food and beverage sales • Comparable restaurant revenue decreased 2.6% (using constant currency rates) • Comparable restaurant guest counts decreased 0.7% • Restaurant labor costs as a percentage
Slide 4: What Sets Us Apart
What Sets Us Apart • Craveable, Customizable Gourmet Burgers • Attentive Service at Appropriate Speed • Affordable Abundance
Slide 5: Regaining Our Momentum
Regaining Our Momentum • Organize and train restaurant teams to manage both dine-in and off- premise • Repurpose some locations to support delivery and catering • Optimize number and pricing of Tavern Double value lineup • LTO news on Finest and Gourmet burgers Much better execution, improved promot
Slide 6: Financial Update
Financial Update
Slide 7: Q2-18 Sales Highlights
Q2-18 Sales Highlights Q2-18 Q2-17 Q2-18 YTD Q2-17 YTD Change Change (12 Weeks) (12 Weeks) (28 Weeks) (28 Weeks) Restaurant revenue (millions) $310.4 $312.4 -0.6% $725.1 $725.8 -0.1% Total company revenues (millions) $315.4 $317.3 -0.6% $736.9 $737.9 -0.1% Company-owned comp revenue(1)(2) -2.6% 0.5%
Slide 8: Comparable Restaurant Revenue Trend
Comparable Restaurant Revenue Trend(1) 5.00% 3.00% 2.7% 1.00% 0.5% -0.1% -1.00% -0.9% -1.2% -3.00% -2.60% -2.6% -3.2% -3.6% -4.3% -5.00% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 (1) Calculated at constant currency rates
Slide 9: Eight Consecutive Quarters of Traffic Outperformance vs. Competitors
Eight 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% 1.6% 1.2% 1.2% 1.0% 0.0% -0.6% -1.0% -0.9% -2.0% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as
Slide 10: Two Year Traffic Outperformance vs. Competition
Two Year Traffic Outperformance vs. Competition 6.5% 5.8% 5.5% 5.2% 5.2% 4.5% 3.5% 3.5% 3.0% 2.5% 1.5% 0.5% 0.3% -0.5% -1.5% -2.5% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 7/15/2018
Slide 11: 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% 19.3% 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 to net income (loss) (
Slide 12: Q2-18 Restaurant Results
Q2-18 Restaurant Results % of Restaurant % of Restaurant Revenue Revenue Favorable Q2-18 Q2-17 (Unfavorable) Cost of sales 24.1% 23.7% (40 bps) Labor 34.3% 34.7% 40 bps Other operating 13.7% 12.8% (90 bps) Occupancy 8.5% 8.0% (50 bps) Restaurant Level Operating Profit(1) 19.3% 20.8% (150 bps) (1) Se
Slide 13: 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% 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 Q2-18
Slide 14: 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 $30.0 $28.8 $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)
Slide 15: Adjusted Earnings Per Diluted Share
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 $0.46 $0.38 $0.35 $0.35 $0.21 $0.15 Q1 Q2 Q3 Q4 2016 2017 2018 See Appendix for reconciliation of non-GAAP Adjusted Earnings Per Diluted Share to Earnings (Loss) Per Diluted Share
Slide 16: In Closing
In Closing
Slide 17: Appendix
Appendix
Slide 18: Adjusted Net Income
CLASSIFIED – INTERNAL USE 18 Adjusted Net Income(1) ($ 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 $6.0 $5.0 $4.5 $4.0 $2.7 $2.0 Q1 Q2 Q3 Q4 2016 2017 2018 (1) See Appendix for reconciliation of non-GAAP Adjusted Net Income to Net Income (Loss) 18
Slide 19: Cash Flow from Operations
Cash Flow from Operations ($ in Millions) $80.0 $70.0 $70.0 $60.0 $57.0 $50.0 $42.5 $40.0 $34.7 $35.0 $30.0 $27.6 $24.6 $20.0 $20.0 $16.9 $10.0 $4.3 $0.0 Q1 Q2 Q3 Q4 2016 2017 2018
Slide 20: Q2-18 Commodity Update
Q2-18 Commodity Update % of Total COGS in Market vs. Contract Q2-18 Steak fries 13.5% 100% contracted through 10/19 Ground beef 13.5% Market Poultry 9.9% 100% contracted though 1/19 Produce 7.5% 70% contracted through 10/18 Bacon 100% contracted through 9/18; Meat 6.8% Prime rib 100% contracted thro
Slide 21: Reconciliation of Adjusted Net Income to Net Income (Loss)
Reconciliation of Adjusted Net Income to Net Income (Loss) and Adjusted Earnings Per Diluted Share to Earnings (Loss) Per Diluted Share ($ in thousands, except per share data) 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net income (loss) as reported $ 14,225 $ 7,552 $ (1,300) $ (8,752) $ 11,567 $ 6
Slide 22: 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 Restaurant revenue $ 396,770 $ 302,117 $ 293,858 $ 287,924 $ 413,451 $ 312,351 $ 301,100 $ 338,154 $ 414,702 $ 310,392 Restaurant operating c
Slide 23: 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 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) Adjustments to net income (loss): Income tax expense (ben
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