Red Robin Gourmet Burgers Reports Results for the Fiscal Fourth Quarter and Year Ended December 30, 2012

  Red Robin Gourmet Burgers Reports Results for the Fiscal Fourth Quarter and
  Year Ended December 30, 2012

Business Wire

GREENWOOD VILLAGE, Colo. -- February 19, 2013

Red Robin Gourmet Burgers, Inc., (NASDAQ: RRGB), a casual dining restaurant
chain serving an innovative selection of high-quality gourmet burgers in a
family-friendly atmosphere, today reported financial results for the 13 and 53
weeks ended December 30, 2012.

Financial Highlights for the 13 Weeks Ended December 30, 2012, Compared to the
12 Weeks Ended December 25, 2011:

  *Earnings per diluted share were $0.45, compared to fiscal fourth quarter
    2011 earnings per diluted share of $0.20, on a GAAP basis. Adjusted
    earnings per diluted share were $0.59, compared to $0.28 in the fiscal
    fourth quarter a year ago. (See Schedule I.)
  *Total revenues increased 16.8% to $240.7 million; Company-owned comparable
    restaurant revenues increased 1.4% on a 13-week comparable basis.
  *Restaurant-level operating profit margin increased to 20.6% from 19.9%.
    (See Schedule II.)
  *The Company opened three new Red Robin^® restaurants.

Net income for the 13 weeks ended December 30, 2012, was $6.5 million compared
to $2.9 million in the 12 weeks ended December 25, 2011. Fiscal fourth quarter
2012 net income excluding charges related to the Company’s debt refinancing
was $8.4 million. See Schedule I below for a reconciliation of adjustments to
net income in the fiscal fourth quarters of 2012 and 2011.

For the 53 weeks ended December 30, 2012, GAAP net income was $28.3 million,
or $1.93 per diluted share, compared to $20.6 million, or $1.34 per diluted
share, for the 52 weeks ended December 25, 2011. Excluding charges related to
the Company’s debt refinancing, adjusted net income for the full fiscal year
2012 was $30.2 million, or $2.06 per diluted share, compared to $24.3 million,
or $1.58 per diluted share, in the full fiscal year 2011. (See schedule I.)
The fifty-third week in fiscal 2012 contributed an estimated $3.1 million to
net income, or approximately $0.21 per diluted share.

“We were very pleased with Red Robin’s business performance during the fourth
quarter, which reflected a solid finish to a successful, foundational year for
our Company,” said Steve Carley, Red Robin Gourmet Burgers, Inc. chief
executive officer. “We once again significantly outpaced the industry in guest
count growth and continued expansion of our operating margins. The outstanding
work of our teams across the enterprise is clearly contributing to improved
results and a stronger, more differentiated Red Robin brand. Looking ahead to
2013, our goal is to build on what we have already accomplished to continue
elevating the guest experience and extending our burger authority, while we
capitalize on our significant growth potential for new unit development.”

Operating Results

Total Company revenues, which include Company-owned restaurant revenues and
franchise royalties, increased 16.8% to $240.7 million in the fiscal fourth
quarter of 2012 versus $206.0 million in the fiscal fourth quarter of 2011.
For fiscal 2012, total revenues increased 6.8% to $977.1 million.

System-wide restaurant revenues in the fiscal fourth quarter of 2012 totaled
$327.5 million, compared to $285.1 million in the same period last year at
constant currency rates. For fiscal 2012, system-wide restaurant revenues
increased 5.7% to $1.3 billion.

Comparable restaurant revenues increased 1.4% for Company-owned restaurants in
the fiscal fourth quarter of 2012 compared to the prior year on a 13-week
comparable basis. In the fourth quarter, guest counts increased 0.3% on a
comparable basis while average guest check increased 1.1%. For the full fiscal
year 2012, comparable restaurant revenues increased 1.1% compared to the prior
year resulting from a 1.7% increase in average guest check, partially offset
by a 0.6 % decrease in guest counts.

Restaurant revenue performance


                        Q4 2012  Q4 2011
Average weekly revenues          
Company-owned units*     $54,441  $51,844
Franchised units         $52,642  $50,215
Total operating weeks            
Company-owned units      4,395    3,909
Franchised units         1,726    1,644
*Excludes Red Robin’s Burger Works^®

Restaurant-level operating profit margins at Company-owned restaurants were
20.6% in the fiscal fourth quarter of 2012 compared to 19.9% in the fiscal
fourth quarter of 2011, an improvement of 70 basis points. The higher margins
resulted primarily from lower cost of goods sold, improved sales mix, and the
impact of the more-profitable additional week in fiscal 2012, partially offset
by higher labor costs. Schedule II of this earnings release defines
restaurant-level operating profit, discusses why it is a useful metric for
investors and reconciles this metric to income from operations and net income.

Other Results

General and administrative costs were $20.5 million, an increase of $1.4
million in the fourth quarter 2012 due mainly to the costs associated with the
additional operating week. Selling expenses were $6.4 million in the fourth
quarter 2012, an increase of $1.9 million, due primarily to higher marketing
fund contributions related to increased sales and gift card expenses.

The Company had an effective tax rate of 23.1% in fiscal 2012, compared to
6.8% in the prior year.

Restaurant Openings

As of the end of the fiscal fourth quarter of 2012, there were 339
Company-owned Red Robin^® restaurants, including five Red Robin’s Burger
Works^®, and 133 franchised Red Robin locations. In the fiscal fourth quarter
of 2012, the Company opened three new Red Robin restaurants, including the
Company’s first mid-size prototypes. One franchised location in Texas that
closed during the fiscal third quarter of 2012 was reopened in the fiscal
fourth quarter of 2012 by a different franchisee.

Debt Refinancing

As previously announced, the Company closed on a new $225 million credit
agreement in December. The new credit facility, a five-year $225 million
revolving line of credit, replaces a facility comprised of a $150 million term
loan and $100 million revolving line of credit that was scheduled to mature in
May 2016. In conjunction with the closing of the credit agreement, the Company
recorded a non-cash, pre-tax charge of approximately $2.9 million, comprised
of a write-off of unamortized fees from the prior credit agreement and a
charge related to the re-designation of an interest rate swap in the fourth
fiscal quarter 2012.

Balance Sheet and Liquidity

On December 30, 2012, the Company had cash and cash equivalents of $22.4
million and total debt of $135.0 million, including $10.0 million of capital
lease liabilities.

During the fiscal fourth quarter of 2012, the Company repurchased
approximately 281,000 shares of stock for $8.6 million. In fiscal year 2012,
the Company repurchased a total of approximately 803,000 shares for $24.3
million.

During the fiscal year 2012, cash generated from operations totaled $94.4
million compared to $95.7 million in fiscal 2011, and capital investments
amounted to $63.2 million, including $3.2 million for the acquisition of a
franchised restaurant, compared to $44.1 million in fiscal 2011.

Outlook for 2013

Red Robin’s 2013 fiscal year consists of 52 weeks ending on December 29, 2013.

In fiscal 2013, the Company expects comparable restaurant sales growth of 2.5%
to 3.0% compared to fiscal 2012 based on a combination of increases in prices,
items sold per guest and increased guest visits. Additionally, the Company
plans to open 20 new company-owned restaurants, including up to five new Red
Robin’s Burger Works^® restaurants.

Restaurant-level operating profit margins in fiscal 2013 are expected to be
flat to down 10 basis points as a percentage of restaurant sales compared to
20.7% in fiscal 2012 due mainly to higher commodity prices.

General and Administrative costs are expected to range between $83 million and
$84 million, while Selling expenses are expected to remain consistent with
2012 at 2.8% of sales. Depreciation is expected to be around $58 million, an
increase of approximately $3 million from fiscal 2012 due to depreciation of
newly implemented technology systems, as well as an increased number of units
in the Company’s restaurant base.

The income tax rate in fiscal 2013 is expected to range from 23% to 24%.

During fiscal 2013, the Company expects between $50 million and $55 million in
capital expenditures, which will be used to open new restaurants, as well as
fund restaurant and technology infrastructure improvements and remodeling
investments.

The sensitivity of the Company’s earnings per diluted share to a 1% change in
guest counts for fiscal 2013 is estimated to be $0.23 on an annualized basis.
Additionally, a 10 basis point change in restaurant-level operating margin is
expected to impact earnings per diluted share by approximately $0.05, and a
change of $187,000 in pre-tax income or expense is equivalent to approximately
$0.01 per diluted share.

Investor Conference Call and Webcast

Red Robin will host an investor conference call to discuss its fiscal fourth
quarter 2012 results today at 10:00 a.m. ET. The conference call number is
(888) 329-8862, or for international callers (719) 457-2628. The financial
information that the Company intends to discuss during the conference call is
included in this press release and will be available on the “Investors” link
of the Company's website at www.redrobin.com. Prior to the conference call,
the Company will post supplemental financial information that will be
discussed during the call and live webcast.

To access the supplemental financial information and webcast, please visit
www.redrobin.com and select the “Investors” link from the menu. A replay of
the live conference call will be available from two hours after the call until
midnight on Tuesday, February 26, 2013. The replay can be accessed by dialing
(877) 870-5176, or (858) 384-5517 for international callers. The conference ID
is 4081874. The webcast replay will also be available on the Company’s website
until midnight on Sunday, April 21, 2013.

About Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB)

Red Robin Gourmet Burgers, Inc. (www.redrobin.com), a casual dining restaurant
chain founded in 1969 that operates through its wholly-owned subsidiary, Red
Robin International, Inc., is the gourmet burger expert, famous for serving
more than two dozen craveable, high-quality burgers with Bottomless Steak
Fries® in a fun environment welcoming to guests of all ages. In addition to
its many burger offerings, Red Robin serves a wide variety of salads, soups,
appetizers, entrees, desserts and signature Mad Mixology® Beverages. There
currently are 473 Red Robin locations across the United States and Canada,
including 335 company-owned Red Robin® restaurants and five Red Robin’s Burger
Works^® locations, and 133 Red Robin® restaurants operating under franchise
agreements.

Forward-Looking Statements:

Forward-looking statements in this press release regarding our expected
earnings per share, restaurant sales, new restaurant growth, future economic
performance, capital expenditures, certain statements under the heading
“Outlook for 2013” and all other statements that are not historical facts, are
made under the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements are based on assumptions believed by the
Company to be reasonable and speak only as of the date on which such
statements are made. Without limiting the generality of the foregoing, words
such as “continue,” “will,” “expect,” “believe,” “anticipate,” “intend,” or
“estimate,” or the negative or other variations thereof or comparable
terminology are intended to identify forward-looking statements. We undertake
no obligation to update such statements to reflect events or circumstances
arising after such date, and we caution investors not to place undue reliance
on any such forward-looking statements. Forward-looking statements involve
risks and uncertainties that could cause actual results to differ materially
from those described in the statements based on a number of factors, including
but not limited to the following: the effectiveness of the Company’s marketing
strategies, loyalty program and guest count initiatives to achieve restaurant
sales growth; the ability to fulfill planned expansion; the cost and
availability of key food products, labor and energy; the ability to achieve
anticipated revenue and cost savings from our anticipated new technology
systems and other initiatives; availability of capital or credit facility
borrowings; the adequacy of cash flows or available debt resources to fund
operations and growth opportunities; federal, state and local regulation of
our business; and other risk factors described from time to time in the
Company’s Form 10-K, Form 10-Q and Form 8-K reports (including all amendments
to those reports) filed with the U.S. Securities and Exchange Commission.

                                                             
                                                                  
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                                                                  
                     Thirteen       Twelve         Fifty-three    Fifty-two
                     Weeks Ended    Weeks Ended    Weeks Ended    Weeks Ended
                     December 30,   December 25,   December 30,   December 25,
                     2012           2011           2012           2011
                                                                  
Revenues:
Restaurant revenue   $  236,666     $  202,504    $  960,994     $  898,842 
Franchise
royalties and fees     4,013        3,477        16,138       16,008  
and other revenue
Total revenues         240,679      205,981      977,132      914,850 
                                                                  
Costs and
expenses:
Restaurant
operating costs
(exclusive of
depreciation and
amortization shown
separately below):
Cost of sales           59,696         51,464         242,641        227,063
Labor                   79,690         67,915         323,100        303,503
Other operating         30,815         27,270         125,471        124,238
Occupancy               17,758         15,570         70,971         65,785
Depreciation and        13,000         12,521         55,468         55,272
amortization
General and             20,462         19,058         83,716         79,087
administrative
Selling                 6,416          4,558          27,082         24,037
Pre-opening costs       639            728            3,474          3,527
Asset impairment       -            2,418        -            4,337   
charge
Total costs and        228,476      201,502      931,923      886,849 
expenses
                                                                  
Income from             12,203         4,479          45,209         28,001
operations
                                                                  
Other expense:
Interest expense        1,249          1,487          5,662          5,885
Loss on debt            2,919          -              2,919          -
refinanacing
Other                  (9      )     2            (229    )     28      
(income)/expense
Total other             4,159          1,489          8,352          5,913
expenses
                                                                  
Income before           8,044          2,990          36,857         22,088
income taxes
Income tax expense     1,552        85           8,526        1,511   
Net income           $  6,492      $  2,905      $  28,331     $  20,577  
Earnings per
share:
Basic                $  0.46       $  0.20       $  1.97       $  1.36    
Diluted              $  0.45       $  0.20       $  1.93       $  1.34    
Weighted average
shares
outstanding:
Basic                  14,085       14,620       14,411       15,122  
Diluted                14,326       14,823       14,669       15,357  

                                                             
                                                                  
RED ROBIN GOURMET BURGERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
                                                                  
                                                   December 30,   December 25,
                                                   2012           2011
Assets:
Current Assets:
Cash and cash equivalents                          $ 22,440       $  35,036
Accounts receivable, net                             16,386          14,785
Inventories                                          18,371          18,040
Prepaid expenses and other current assets            13,439          9,970
Income tax receivable                                858             1,387
Deferred tax asset                                  3,010         1,429   
Total current assets                                74,504        80,647  
Property and equipment, net                          413,258         402,360
Goodwill                                             62,525          61,769
Intangible assets, net                               37,203          38,969
Other assets, net                                   9,642         9,231   
Total assets                                       $ 597,132     $  592,976 
                                                                  
Liabilities and Stockholders’ Equity:
Current Liabilities:
Trade accounts payable                             $ 14,241       $  14,798
Construction related payables                        4,694           3,328
Accrued payroll and payroll related                  31,476          35,044
liabilities
Unearned revenue, net                                28,187          24,139
Accrued liabilities                                  22,901          19,045
Current portion of credit facility                   -               9,375
Current portion of long-term debt and               784           757     
capital lease obligations
Total current liabilities                           102,283       106,486 
Deferred rent                                        44,801          40,025
Long-term portion of credit facility                 125,000         136,875
Other long-term debt and capital lease               9,211           9,924
obligations
Other non-current liabilities                       8,918         4,968   
Total liabilities                                   290,213       298,278 
                                                                  
Stockholders’ Equity:
Common stock; $0.001 par value: 30,000,000
shares authorized; 17,499,147 and 17,276,404         17              17
shares issued; 13,999,278 and 14,579,257
shares outstanding
Preferred stock, $0.001 par value: 3,000,000
shares authorized; no shares issued and              -               -
outstanding
Treasury stock 3,499,869 and 2,697,147               (107,589 )      (83,285 )
shares, at cost
Paid-in capital                                      185,974         178,111
Accumulated other comprehensive gain (loss),         5               (326    )
net of tax
Retained earnings                                   228,512       200,181 
Total stockholders’ equity                          306,919       294,698 
Total liabilities and stockholders’ equity         $ 597,132     $  592,976 

                                                               
Schedule I

Reconciliation of Non-GAAP Results to GAAP Results
(In thousands, except per share data)

In addition to the results provided in accordance with Generally Accepted
Accounting Principles (“GAAP”) throughout this press release, the Company has
provided non-GAAP measurements which present the thirteen and fifty-three
weeks ended December 30, 2012 and the twelve and fifty-two weeks ended
December 25, 2011, net income and basic and diluted earnings per share,
excluding the effects of the refinancing of the Company’s debt in the fourth
quarter of 2012; and severance expense, executive transition costs, and
initial gift card breakage revenue recorded in first and second fiscal
quarters of 2011. The Company believes that the presentation of net income and
earnings per share exclusive of the identified items gives the reader
additional insight into the ongoing operational results of the Company. This
supplemental information will assist with comparisons of past and future
financial results against the present financial results presented herein. The
2012 and 2011 non-GAAP results were calculated using an assumed 23.5% and
11.5% normalized tax rate, respectively on income and expense items before
taxes, excluding the identified items. The non- GAAP measurements are intended
to supplement the presentation of the Company’s financial results in
accordance with GAAP.
                                                                    
                  Thirteen         Twelve           Fifty-three     Fifty-two
                  Weeks Ended      Weeks Ended      Weeks Ended     Weeks
                                                                    Ended
                  December 30,     December 25,     December 30,    December
                  2012             2011             2012            25,
                                                                    2011
                                                                    
Net income as     $  6,492         $  2,905         $  28,331       $ 20,577
reported
Loss on debt         2,919            -                2,919          -
refinancing
Executive
transition and       -                -                -              2,228
severance
expense
Asset
impairment and       -                2,418            -              4,337
restaurant
closure costs
Initial
cumulative
gift card            -                -                -              (438   )
breakage
income
Income tax          (1,020  )       (1,208  )       (1,020  )     (2,391 )
expense
                                                                    
Adjusted net      $  8,391        $  4,115        $  30,230      $ 24,313 
income
                                                                    
Basic net
income per
share:
Net income as     $  0.46          $  0.20          $  1.97         $ 1.36
reported
Loss on debt         0.21             -                0.20           -
refinancing
Executive
transition and       -                -                -              0.15
severance
expense
Asset
impairment and       -                0.17             -              0.29
restaurant
closure costs
Initial
cumulative
gift card            -                -                -              (0.03  )
breakage
income
Income tax          (0.07   )       (0.10   )       (0.07   )     (0.16  )
expense
                                                                    
Adjusted
earnings per      $  0.60         $  0.27         $  2.10        $ 1.61   
share - basic
                                                                    
                                                                    
Diluted net
income per
share:
Net income as     $  0.45          $  0.20          $  1.93         $ 1.34
reported
Loss on debt         0.20             -                0.20           -
refinancing
Executive
transition and       -                -                -              0.15
severance
expense
Asset
impairment and       -                0.16             -              0.28
restaurant
closure costs
Initial
cumulative
gift card            -                -                -              (0.03  )
breakage
income
Income tax          (0.06   )       (0.08   )       (0.07   )     (0.16  )
expense
                                                                    
Adjusted
earnings per      $  0.59         $  0.28         $  2.06        $ 1.58   
share -
diluted
                                                                    
Weighted
average shares
outstanding:
Basic                14,085           14,620           14,411         15,122
Diluted              14,326           14,823           14,669         15,357



Schedule II

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income
from Operations and Net Income
(In thousands, except percentage data)

The Company believes that restaurant-level operating profit is an important measure for management and
investors because it is widely regarded in the restaurant industry as a useful metric by which to evaluate
restaurant-level operating efficiency and performance. The Company defines restaurant-level operating profit
to be restaurant revenues minus restaurant-level operating costs, excluding restaurant closures and
impairment costs. The measure includes restaurant level occupancy costs, which include fixed rents,
percentage rents, common area maintenance charges, real estate and personal property taxes, general
liability insurance and other property costs, but excludes depreciation related to restaurant buildings and
leasehold improvements. The measure excludes depreciation and amortization expense, substantially all of
which is related to restaurant level assets, because such expenses represent historical sunk costs which do
not reflect current cash outlay for the restaurants. The measure also excludes selling, general and
administrative costs, and therefore excludes occupancy costs associated with selling, general and
administrative functions, and pre-opening costs. The Company excludes restaurant closure costs as they do
not represent a component of the efficiency of continuing operations. Restaurant impairment costs are
excluded, because, similar to depreciation and amortization, they represent a non-cash charge for the
Company’s investment in its restaurants and not a component of the efficiency of restaurant operations.
Restaurant-level operating profit is not a measurement determined in accordance with generally accepted
accounting principles (“GAAP”) and should not be considered in isolation, or as an alternative, to income
from operations or net income as indicators of financial performance. Restaurant-level operating profit as
presented may not be comparable to other similarly titled measures of other companies. The table below sets
forth certain unaudited information for the thirteen and fifty-three weeks ended December 30, 2012 and the
twelve and fifty-two weeks ended December 25, 2011, expressed as a percentage of total revenues, except for
the components of restaurant operating costs, which are expressed as a percentage of restaurant revenues.

                  Thirteen              Twelve                Fifty-three           Fifty-two
                   Weeks Ended            Weeks Ended            Weeks Ended            Weeks Ended
                   December30, 2012      December25, 2011      December30, 2012      December25, 2011
Restaurant         $ 236,666   98.3 %   $ 202,504   98.3 %   $ 960,994   98.3 %   $ 898,842   98.3 %
revenues
Restaurant
operating costs
(exclusive of
depreciation and
amortization
shown separately
below):
Cost of sales        59,696      25.2       51,464      25.4       242,641     25.2       227,063     25.3
Labor                79,690      33.7       67,915      33.5       323,100     33.6       303,503     33.8
Other operating      30,815      13.0       27,270      13.5       125,471     13.1       124,238     13.8
Occupancy           17,758     7.5      15,570     7.7      70,971     7.4      65,785     7.3  
Restaurant-level    48,707     20.6     40,285     19.9     198,811    20.7     178,253    19.8 
operating profit
                                                                                                      
Add – Franchise
royalties and        4,013       1.7        3,477       1.7        16,138      1.7        16,008      1.7
fees and other
revenues
Deduct – other
operating:
Depreciation and     13,000      5.4        12,521      6.1        55,468      5.7        55,272      6.0
amortization
General and          20,462      8.5        19,058      9.3        83,716      8.5        79,087      8.5
administrative
Selling              6,416       2.7        4,558       2.2        27,082      2.8        24,037      2.6
Pre-opening          639         0.3        728         0.4        3,474       0.4        3,527       0.4
costs
Asset impairment    -          0.0      2,418      1.2      -          0.0      4,337      0.5  
charge
Total other         40,517     16.9     39,283     19.2     169,740    17.4     166,260    18.0 
operating
                                                                                                      
Income from          12,203      5.1        4,479       2.2        45,209      4.6        28,001      3.1
operations
                                                                                                      
Interest
expense, net and     4,159       1.7        1,489       0.7        8,352       0.9        5,913       0.6
other
Income tax          1,552      0.6      85         0.0      8,526      0.9      1,511      0.2  
expense
Total other          5,711       2.3        1,574       0.7        16,878      1.8        7,424       0.8
                                                                                                      
Net income         $ 6,492      2.7  %   $ 2,905      1.4  %   $ 28,331     2.9  %   $ 20,577     2.2  %


Certain percentage amounts in the table above do not total due to rounding as
well as the fact that restaurant operating costs are expressed as a percentage
of restaurant revenues and not total revenues.

Contact:

Red Robin Gourmet Burgers, Inc.
Media Relations Contact:
Kevin Caulfield, Senior Director of Communications
303-846-5470
or
Investor Relations Contact:
Stuart Brown, Chief Financial Officer
303-846-6000
 
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