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Actionable news in RRGB: Red Robin Gourmet Burgers, Inc.,

Red Robin Gourmet Burgers Reports Earnings Per Diluted Share Up

The following excerpt is from the company's SEC filing.

for the Fiscal Third Quarter

Ended

Greenwood Village, CO –

November 3, 2015

– 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 12 weeks ended

Third Quarter 2015 Financial Highlights

Total revenues were

$283.4 million

, an increase of

Comparable restaurant revenue increased

Restaurant-level operating profit, as a percent of restaura nt revenue, increased to

(see Schedule II)

EBITDA increased

$31.2 million

$25.6 million

(see Schedule III)

Net income increased

$8.3 million

$7.2 million

Earnings per diluted share increased

compared to

Year to date net income was

$36.0 million

. After adjusting for a change in accounting estimate for gift card breakage in the current year and executive transition costs in the prior year, year to date net income increased

$35.1 million

. Year to date earnings per diluted share was

, compared to

a year ago, an increase of

. Year to date earnings per diluted share on an adjusted basis was

. See Schedule I for a reconciliation of adjusted net income and adjusted earnings per share (each, a non-GAAP financial measure) to net income and earnings per share, respectively.

“Our guests continue to react favorably to our restaurant upgrades and our menu innovation, both of which are critical in this increasingly competitive environment,” said Steve Carley, Red Robin Gourmet Burgers, Inc. chief executive officer. “Our third quarter sales increase is the direct result of guests enjoying more of what we have to offer.”

Operating Results

Total Company revenues, which primarily include Company-owned restaurant revenue and franchise royalties, increased

in the third quarter of 2015 from

$267.4 million

in the third quarter of 2014. Comparable restaurant revenue increased

$8.2 million

, new restaurant openings, including acquisitions and net of closures, contributed

$7.4 million

of additional revenue, and franchise and other revenue increased

$0.4 million

. The

additional revenue from newly opened and acquired restaurants included a $2.1 million unfavorable foreign exchange impact.

System-wide restaurant revenue (including franchised units) for the third quarter of 2015 totaled

$350.6 million

$330.9 million

for the third quarter in 2014.

in the third quarter of 2015 compared to the same period a year ago, driven by a 3.6% increase in average guest check and offset by 0.1% decrease in guest count. Comparable restaurants are those Company-owned restaurants that have operated five full quarters during the period presented, and such restaurants are only included in the comparable metrics if they are comparable for the entirety of both periods presented.

Restaurant-level operating profit margin (a non-GAAP financial measure) was

in the same period a year ago, an improvement of 210 basis points. The improved margin resulted from a 150 basis point decrease in cost of sales and a 70 basis point decrease in labor costs, partially offset by higher occupancy 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.

Restaurant Revenue Performance

Q3 2015

Q3 2014

Average weekly sales per unit:

Company-owned – Total

55,780

54,684

Company-owned – Comparable

56,462

54,580

Franchised units – Comparable

59,664

57,179

Total operating weeks:

Company-owned units

_________________________________________________________

Excludes Red Robin Burger Works

fast casual restaurants, which had 120 and 84 operating weeks in the third quarter of 2015 and 2014

Other Results

Depreciation and amortization costs increased to

$18.6 million

$15.2 million

in the third quarter of 2014. The increased depreciation was primarily related to restaurants remodeled under the Brand Transformation Initiative and new restaurants opened since the third quarter 2014.

General and administrative costs were

$23.7 million

of total revenues, in the third quarter of 2015, compared to

$20.1 million

of revenues in the same period a year ago. The increase of

$3.6 million

resulted primarily from increased incentive compensation, and higher manager hiring and training costs.

Selling expenses were flat at

$7.9 million

$7.7 million

of total revenues in the prior year.

Pre-opening costs, including acquisition-related costs, were

$2.2 million

$2.6 million

in the same period a year ago. A $0.5 million decrease in acquisition costs was partially offset by an increase in restaurant pre-opening costs due to the timing of restaurant openings in 2015.

The Company had an effective tax rate of

in the third quarter of 2015, compared to a

rate in the same period a year ago. The year to date effective tax rate was

rate in same period of 2014.

Restaurant Development

As of the end of the third quarter of 2015, there were

Company-owned Red Robin

franchised Red Robin restaurants for a total of

restaurants. During the third quarter, the Company opened five Red Robin restaurants, relocated three Red Robin restaurants, and acquired one franchised restaurant.

Under the Brand Transformation Initiative, the Company completed 53 remodels during the third quarter towards its goal of 150 remodels this year. The Company anticipates having over 300 restaurants conforming to the new brand standards by year end, including new restaurant openings.

Balance Sheet and Liquidity

As of October 4, 2015, the Company had cash and cash equivalents of

$21.8 million

and total debt of

$172.9 million

$8.1 million

of capital lease liabilities. The Company increased debt by

$25.0 million

since the beginning of fiscal year 2015.

During the third quarter, the Company purchased

136,568

shares of the Company's common stock for

$10.6 million

. As of October 4, 2015, there was approximately

$39.4 million

remaining under the current board authorization for stock repurchases.

Outlook for 2015

Red Robin’s 2015 fiscal year consists of 52 weeks and will end on December 27, 2015.

In fiscal year 2015, the Company expects comparable revenue growth of approximately 2.5% and total revenue growth near 11.0%. The Company plans to open 20 new Red Robin restaurants and three Red Robin Burger Works in fiscal year 2015 resulting in operating week growth, inclusive of 2014 acquisitions, approaching 8.5%.

Capital investments in fiscal year...


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