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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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84-1573084
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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6312 S. Fiddler’s Green Circle, Suite 200 N
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Greenwood Village, CO
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80111
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Class
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Outstanding at May 20, 2014
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Common Stock, $0.001 par value per share
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14,291,221
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Page
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April 20, 2014
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December 29, 2013
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||||
Assets:
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Current assets:
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||||
Cash and cash equivalents
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$
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14,635
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$
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17,108
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Accounts receivable, net
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14,326
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22,568
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Inventories
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21,922
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21,992
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Prepaid expenses and other current assets
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9,191
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15,766
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Deferred tax asset and other
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2,959
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3,212
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Total current assets
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63,033
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80,646
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Property and equipment, net
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451,834
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444,727
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Goodwill
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64,608
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62,525
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Intangible assets, net
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38,862
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36,800
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Other assets, net
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11,165
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9,947
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Total assets
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$
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629,502
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$
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634,645
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Liabilities and stockholders' equity:
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Current liabilities:
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||||
Trade accounts payable
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$
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17,376
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$
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19,117
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Construction related payables
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14,105
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14,682
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Accrued payroll and payroll-related liabilities
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38,701
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45,919
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Unearned revenue
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27,037
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35,740
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Accrued liabilities and other
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26,999
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24,454
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Total current liabilities
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124,218
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139,912
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Deferred rent
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54,597
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51,985
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Long-term debt
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78,375
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79,375
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Long-term portion of capital lease obligations
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8,317
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8,513
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Other non-current liabilities
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9,147
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7,457
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Total liabilities
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274,654
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287,242
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Stockholders' equity:
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Common stock; $0.001 par value: 30,000 shares authorized; 17,845 and 17,851 shares issued; 14,298 and 14,350 shares outstanding
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18
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18
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Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding
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—
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—
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Treasury stock 3,547 and 3,501 shares, at cost
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(116,005
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)
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(110,486
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)
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Paid-in capital
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198,190
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197,145
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Accumulated other comprehensive loss, net of tax
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(50
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)
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(25
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)
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Retained earnings
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272,695
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260,751
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Total stockholders' equity
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354,848
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347,403
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Total liabilities and stockholders' equity
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$
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629,502
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$
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634,645
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Sixteen Weeks Ended
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||||||
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April 20, 2014
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April 21, 2013
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Revenues:
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Restaurant revenue
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$
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334,995
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$
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301,313
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Franchise royalties, fees and other revenues
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5,489
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5,036
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Total revenues
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340,484
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306,349
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Costs and expenses:
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Restaurant operating costs (excluding depreciation and amortization shown separately below):
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Cost of sales
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84,220
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74,982
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Labor
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110,921
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101,882
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Other operating
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40,597
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37,090
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Occupancy
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24,282
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22,573
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Depreciation and amortization
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18,886
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17,834
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Selling, general and administrative expenses
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42,423
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37,608
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Pre-opening and acquisition costs
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2,113
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834
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Total costs and expenses
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323,442
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292,803
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Income from operations
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17,042
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13,546
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Other expense:
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Interest expense, net and other
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674
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1,089
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Income before income taxes
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16,368
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12,457
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Provision for income taxes
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4,424
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2,977
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Net income
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$
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11,944
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$
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9,480
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Earnings per share:
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Basic
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$
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0.83
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$
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0.67
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Diluted
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$
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0.82
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$
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0.66
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Weighted average shares outstanding:
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Basic
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14,352
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14,062
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Diluted
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14,592
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14,341
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Sixteen Weeks Ended
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April 20, 2014
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April 21, 2013
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Net income
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$
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11,944
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$
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9,480
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Cash flow hedges:
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Net change in fair value of interest rate swap
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(70
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)
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(80
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)
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Net loss reclassified into interest expense
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29
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20
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Total change in unrealized loss related to cash flow hedges
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(41
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)
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(60
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)
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Income tax benefit related to items of other comprehensive income
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16
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24
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Other comprehensive loss, net of tax
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(25
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)
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(36
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)
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Total comprehensive income
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$
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11,919
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$
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9,444
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Sixteen Weeks Ended
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||||||
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April 20, 2014
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April 21, 2013
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Cash flows from operating activities:
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Net income
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$
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11,944
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$
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9,480
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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18,886
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17,834
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Stock-based compensation expense
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1,009
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1,192
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Other, net
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(659
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)
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(285
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)
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Changes in operating assets and liabilities:
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Accounts receivable
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8,167
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7,187
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Trade accounts payable and accrued liabilities
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(3,246
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)
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6,476
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Unearned revenue
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(8,305
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)
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(7,101
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)
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Other operating assets and liabilities, net
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8,239
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5,584
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Net cash provided by operating activities
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36,035
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40,367
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Cash flows from investing activities:
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Purchases of property, equipment and intangible assets
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(24,314
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)
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(13,640
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)
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Acquisition of franchise restaurants, net of cash acquired
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(7,958
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)
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—
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Other investing activities
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(71
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)
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—
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Net cash used in investing activities
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(32,343
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)
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(13,640
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)
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Cash flows from financing activities:
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Borrowings of long-term debt
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39,000
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30,000
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Payments of long-term debt and capital leases
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(40,206
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)
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(64,749
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)
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Purchase of treasury stock
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(7,500
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)
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—
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|
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Tax benefit from exercise of stock options
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927
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—
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|
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Proceeds from exercise of stock options and employee stock purchase plan
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1,614
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|
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2,957
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|
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Net cash used in financing activities
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(6,165
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)
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(31,792
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)
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Net decrease in cash and cash equivalents
|
|
(2,473
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)
|
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(5,065
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)
|
||
Cash and cash equivalents, beginning of year
|
|
17,108
|
|
|
22,440
|
|
||
Cash and cash equivalents, end of year
|
|
$
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14,635
|
|
|
$
|
17,375
|
|
|
|
|
|
|
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Supplemental of cash flow information
|
|
|
|
|
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Income taxes paid
|
|
$
|
2,026
|
|
|
$
|
1,521
|
|
Interest paid, net of amounts capitalized
|
|
$
|
797
|
|
|
$
|
948
|
|
Balance, December 30, 2012
|
|
$
|
62,525
|
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Acquisition
|
|
—
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Balance, December 29, 2013
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|
$
|
62,525
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|
Acquisition
|
|
2,083
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|
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Balance, April 20, 2014
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|
$
|
64,608
|
|
|
|
April 20, 2014
|
|
December 29, 2013
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||||||||||||||||||||
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Gross
Carrying
Amount
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Accumulated
Amortization
|
|
Net
Carrying
Amount
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Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Intangible assets subject to amortization:
|
|
|
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|
||||||||||||
Franchise rights
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|
$
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46,611
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|
|
$
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(18,537
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)
|
|
$
|
28,074
|
|
|
$
|
43,330
|
|
|
$
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(17,622
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)
|
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$
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25,708
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Leasehold interests
|
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12,656
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|
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(5,272
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)
|
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7,384
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12,476
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(4,875
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)
|
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7,601
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|
||||||
Liquor licenses
|
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9,937
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|
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(9,378
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)
|
|
559
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|
|
9,924
|
|
|
(9,278
|
)
|
|
646
|
|
||||||
|
|
$
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69,204
|
|
|
$
|
(33,187
|
)
|
|
$
|
36,017
|
|
|
$
|
65,730
|
|
|
$
|
(31,775
|
)
|
|
$
|
33,955
|
|
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liquor licenses
|
|
$
|
2,845
|
|
|
$
|
—
|
|
|
$
|
2,845
|
|
|
$
|
2,845
|
|
|
$
|
—
|
|
|
$
|
2,845
|
|
Intangible assets, net
|
|
$
|
72,049
|
|
|
$
|
(33,187
|
)
|
|
$
|
38,862
|
|
|
$
|
68,575
|
|
|
$
|
(31,775
|
)
|
|
$
|
36,800
|
|
Remainder of 2014
|
|
$
|
2,289
|
|
2015
|
|
3,195
|
|
|
2016
|
|
3,118
|
|
|
2017
|
|
3,089
|
|
|
2018
|
|
3,017
|
|
|
Thereafter
|
|
21,309
|
|
|
|
|
$
|
36,017
|
|
|
Sixteen Weeks Ended
|
|
||||||
|
April 20, 2014
|
|
April 21, 2013
|
|
||||
Risk-free interest rate
|
1.7
|
|
%
|
0.7
|
|
%
|
||
Expected years until exercise
|
5.8
|
|
|
4.1
|
|
|
||
Expected stock volatility
|
44.7
|
|
%
|
44.3
|
|
%
|
||
Dividend yield
|
—
|
|
%
|
—
|
|
%
|
||
Weighted average Black-Scholes fair value per share at date of grant
|
$
|
31.53
|
|
|
$
|
14.84
|
|
|
|
Stock Options
|
|
Restricted Stock Units
|
||
Outstanding, December 29, 2013
|
491
|
|
|
139
|
|
Granted
|
67
|
|
|
19
|
|
Forfeited/ expired
|
(6
|
)
|
|
(4
|
)
|
Exercised/ vested
|
(42
|
)
|
|
(22
|
)
|
Outstanding, April 20, 2014
|
510
|
|
|
132
|
|
|
Sixteen Weeks Ended
|
||||||
|
April 20, 2014
|
|
April 21, 2013
|
||||
Labor related
|
$
|
31
|
|
|
$
|
69
|
|
Selling, general and administrative related
|
978
|
|
|
1,123
|
|
||
Total stock-based compensation
|
$
|
1,009
|
|
|
$
|
1,192
|
|
|
|
Sixteen Weeks Ended
|
||||||
|
|
4/20/2014
|
|
4/21/2013
|
||||
Net income
|
|
$
|
11,944
|
|
|
$
|
9,480
|
|
|
|
|
|
|
||||
Basic weighted average shares outstanding
|
|
14,352
|
|
|
14,062
|
|
||
Dilutive effect of stock options and awards
|
|
240
|
|
|
279
|
|
||
Diluted weighted average shares outstanding
|
|
14,592
|
|
|
14,341
|
|
||
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.83
|
|
|
$
|
0.67
|
|
Diluted
|
|
$
|
0.82
|
|
|
$
|
0.66
|
|
|
|
Fair Value at
|
||
|
|
3/24/2014
|
||
Property, plant and equipment
|
|
3,785
|
|
|
Intangible assets
|
|
3,132
|
|
|
Goodwill
|
|
2,083
|
|
|
Other current and non-current assets
|
|
276
|
|
|
Gift card liabilities
|
|
(59
|
)
|
|
Unfavorable market leases
|
|
(1,256
|
)
|
|
Total purchase price
|
|
$
|
7,961
|
|
Derivative in cash flow hedging relationship
|
|
Amount of loss recognized in OCI on derivative (effective portion)
|
|
Location of loss reclassified from AOCI into income (effective portion)
|
|
Amount of loss reclassified from AOCI into income (effective portion)
|
|
Location of loss recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
|
|
Amount of loss recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
|
||||||
Interest rate swap
|
|
$
|
(70
|
)
|
|
Interest expense, net and other
|
|
$
|
(29
|
)
|
|
Interest expense, net and other
|
|
$
|
—
|
|
|
|
Derivative Liability
|
||||||
Balance Sheet Location
|
|
Fair Value at
April 20, 2014
|
|
Fair Value at
December 29, 2013
|
||||
Accrued liabilities
|
|
$
|
492
|
|
|
$
|
516
|
|
Other non-current liabilities
|
|
92
|
|
|
271
|
|
||
Total derivatives
|
|
$
|
584
|
|
|
$
|
787
|
|
|
|
April 20, 2014
|
|
December 29, 2013
|
||||
Unrealized loss related to cash flow hedges, pretax
|
|
$
|
(41
|
)
|
|
$
|
(43
|
)
|
Tax benefit
|
|
16
|
|
|
13
|
|
||
Accumulated other comprehensive loss, net
|
|
$
|
(25
|
)
|
|
$
|
(30
|
)
|
•
|
Financial performance.
|
◦
|
Total revenues increased
$34.1 million
, or
11.1%
, to
$340.5 million
for the sixteen weeks ended
April 20, 2014
as compared to the sixteen weeks ended
April 21, 2013
, primarily due to a
$16.0 million
or
5.4%
increase in comparable restaurant revenue and
$17.7 million
revenue from new restaurant openings and acquired restaurants.
|
◦
|
Restaurant operating costs, as a percentage of restaurant revenue, decreased
90
basis points to
77.6%
for the sixteen weeks ended
April 20, 2014
compared to
78.5%
for the sixteen weeks ended
April 21, 2013
, primarily due to lower labor costs as a result of higher productivity and leverage from higher restaurant sales volumes on fixed costs.
|
◦
|
Net income improved
26.0%
to
$11.9 million
for the sixteen weeks ended
April 20, 2014
from
$9.5 million
for the sixteen weeks ended
April 21, 2013
. Diluted earnings per share increased
24.2%
to
$0.82
for the sixteen weeks ended
April 20, 2014
as compared to
$0.66
for the sixteen weeks ended
April 21, 2013
.
|
•
|
Marketing.
Our Red Robin Royalty™ loyalty program operates in all our Company-owned Red Robin restaurants and has been rolled out to 81 franchised restaurants. We engage our guests through this program with offers designed to increase frequency of visits as a key part of our overall marketing strategy. We also let enrolled guests know early about new menu items to generate awareness and trial. In 2013, we changed our media buying approach to achieve greater continuity with less time off air between televised advertising windows. We also increased our use of digital, social and earned media to reach our core target of adult females. Our new “Million Reasons” advertising campaign features a female spokeswoman to appeal to our core target and create continuity of branding across individual advertisements and media.
|
•
|
Brand Transformation Initiative.
As of
April 20, 2014
, we have remodeled 34 of our Company-owned Red Robin restaurants to our new brand standards and continue to modify and refine aspects of the remodel based on financial returns and guest feedback. In August 2013, we rolled-out new plating and presentation standards and a new spiral menu format to all Company-owned and franchised restaurants. Key elements of the remodel include greater separation of the bar and family dining areas, new exteriors and signage. We plan to remodel at least
50
Company-owned Red Robin restaurants during fiscal year 2014.
|
•
|
Restaurant Development.
We opened four new Red Robin restaurants, closed one Red Robin restaurant and acquired four Red Robin franchised restaurants during the first quarter of 2014. We plan to open an additional 16 Red Robin restaurants during the remainder of 2014. In addition, we entered into purchase agreements in April 2014 to acquire 32 Red Robin® franchised restaurants in the United States and Canada. The acquisition is expected to close late summer 2014. In first quarter of 2014, our franchisees closed one restaurant and sold four restaurants to us. We expect that our franchisees will open up to two new Red Robin restaurants in 2014.
|
•
|
With regards to Red Robin’s Burger Works, we closed one college campus location in the first quarter of 2014. We continue to evaluate the results of different types of trade areas as well as optimize operating performance. The underlying restaurant performance has been mixed with sales at our central business district and lifestyle trade areas performing as expected and our college campus locations performing below our expectations. For 2014, we plan to open five Red Robin’s Burger Works in central business district locations in two new major metropolitan markets.
|
|
|
Sixteen Weeks Ended
|
||||
|
|
April 20, 2014
|
|
April 21, 2013
|
||
Company-owned:
|
|
|
|
|
||
Beginning of period
|
|
361
|
|
|
339
|
|
Opened during the period
|
|
4
|
|
|
3
|
|
Acquired from franchisee
|
|
4
|
|
|
—
|
|
Closed during the period
|
|
(2
|
)
|
|
—
|
|
End of period
|
|
367
|
|
|
342
|
|
Franchised:
|
|
|
|
|
||
Beginning of period
|
|
134
|
|
|
133
|
|
Opened during the period
|
|
—
|
|
|
—
|
|
Sold or closed during the period
|
|
(5
|
)
|
|
—
|
|
End of period
|
|
129
|
|
|
133
|
|
Total number of restaurants
|
|
496
|
|
|
475
|
|
|
|
Sixteen Weeks Ended
|
||||
|
|
April 20, 2014
|
|
April 21, 2013
|
||
Revenues:
|
|
|
|
|
||
Restaurant revenue
|
|
98.4
|
%
|
|
98.4
|
%
|
Franchise royalties, fees and other revenues
|
|
1.6
|
|
|
1.6
|
|
Total revenues
|
|
100.0
|
|
|
100.0
|
|
|
|
|
|
|
||
Costs and expenses:
|
|
|
|
|
||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
|
|
|
|
|
||
Cost of sales
|
|
25.1
|
|
|
24.9
|
|
Labor
|
|
33.1
|
|
|
33.8
|
|
Other operating
|
|
12.1
|
|
|
12.3
|
|
Occupancy
|
|
7.3
|
|
|
7.5
|
|
Total restaurant operating costs
|
|
77.6
|
|
|
78.5
|
|
Depreciation and amortization
|
|
5.5
|
|
|
5.8
|
|
Selling, general and administrative
|
|
12.5
|
|
|
12.3
|
|
Pre-opening and acquisition costs
|
|
0.6
|
|
|
0.3
|
|
Income from operations
|
|
5.0
|
|
|
4.4
|
|
|
|
|
|
|
||
Interest expense, net and other
|
|
0.2
|
|
|
0.4
|
|
Income before income taxes
|
|
4.8
|
|
|
4.1
|
|
Provision for income taxes
|
|
1.3
|
|
|
1.0
|
|
Net income
|
|
3.5
|
%
|
|
3.1
|
%
|
|
|
Sixteen Weeks Ended
|
|||||||||
(Revenues in thousands)
|
|
April 20, 2014
|
|
April 21, 2013
|
|
Percent Change
|
|||||
Restaurant revenue
|
|
$
|
334,995
|
|
|
$
|
301,313
|
|
|
11.2
|
%
|
Franchise royalties, fees and other revenue
|
|
5,489
|
|
|
5,036
|
|
|
9.0
|
%
|
||
Total revenues
|
|
$
|
340,484
|
|
|
$
|
306,349
|
|
|
11.1
|
%
|
Average weekly net sales volumes in Company-owned restaurants(1)
|
|
$
|
58,382
|
|
|
$
|
55,978
|
|
|
4.3
|
%
|
Total operating weeks
|
|
5,810
|
|
|
5,444
|
|
|
6.7
|
%
|
||
Net sales per square foot
|
|
$
|
143
|
|
|
$
|
139
|
|
|
2.9
|
%
|
(1)
|
Excludes Red Robin's Burger Works.
|
|
|
Sixteen Weeks Ended
|
|||||||||
(In thousands, except percentages)
|
|
April 20, 2014
|
|
April 21, 2013
|
|
Percent Change
|
|||||
Cost of sales
|
|
$
|
84,220
|
|
|
$
|
74,982
|
|
|
12.3
|
%
|
As a percent of restaurant revenue
|
|
25.1
|
%
|
|
24.9
|
%
|
|
0.2
|
%
|
|
|
Sixteen Weeks Ended
|
|||||||||
(In thousands, except percentages)
|
|
April 20, 2014
|
|
April 21, 2013
|
|
Percent Change
|
|||||
Labor
|
|
$
|
110,921
|
|
|
$
|
101,882
|
|
|
8.9
|
%
|
As a percent of restaurant revenue
|
|
33.1
|
%
|
|
33.8
|
%
|
|
(0.7
|
)%
|
|
|
Sixteen Weeks Ended
|
|||||||||
(In thousands, except percentages)
|
|
April 20, 2014
|
|
April 21, 2013
|
|
Percent Change
|
|||||
Other operating
|
|
$
|
40,597
|
|
|
$
|
37,090
|
|
|
9.5
|
%
|
As a percent of restaurant revenue
|
|
12.1
|
%
|
|
12.3
|
%
|
|
(0.2
|
)%
|
|
|
Sixteen Weeks Ended
|
|||||||||
(In thousands, except percentages)
|
|
April 20, 2014
|
|
April 21, 2013
|
|
Percent Change
|
|||||
Occupancy
|
|
$
|
24,282
|
|
|
$
|
22,573
|
|
|
7.6
|
%
|
As a percent of restaurant revenue
|
|
7.3
|
%
|
|
7.5
|
%
|
|
(0.2
|
)%
|
|
|
Sixteen Weeks Ended
|
|||||||||
(In thousands, except percentages)
|
|
April 20, 2014
|
|
April 21, 2013
|
|
Percent Change
|
|||||
Depreciation and amortization
|
|
$
|
18,886
|
|
|
$
|
17,834
|
|
|
5.9
|
%
|
As a percent of total revenues
|
|
5.5
|
%
|
|
5.8
|
%
|
|
(0.3
|
)%
|
|
|
Sixteen Weeks Ended
|
|||||||||
(In thousands, except percentages)
|
|
April 20, 2014
|
|
April 21, 2013
|
|
Percent Change
|
|||||
Selling, general and administrative
|
|
$
|
42,423
|
|
|
$
|
37,608
|
|
|
12.8
|
%
|
As a percent of total revenues
|
|
12.5
|
%
|
|
12.3
|
%
|
|
0.2
|
%
|
|
|
Sixteen Weeks Ended
|
|||||||||
(In thousands, except percentages)
|
|
April 20, 2014
|
|
April 21, 2013
|
|
Percent Change
|
|||||
Pre-opening and acquisition costs
|
|
$
|
2,113
|
|
|
$
|
834
|
|
|
153.4
|
%
|
As a percent of total revenues
|
|
0.6
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
|
Sixteen Weeks Ended
|
||||||
|
|
April 20, 2014
|
|
April 21, 2013
|
||||
Net cash provided by operating activities
|
|
$
|
36,035
|
|
|
$
|
40,367
|
|
Net cash used in investing activities
|
|
(32,343
|
)
|
|
(13,640
|
)
|
||
Net cash used in financing activities
|
|
(6,165
|
)
|
|
(31,792
|
)
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(2,473
|
)
|
|
$
|
(5,065
|
)
|
|
Sixteen Weeks Ended April 20, 2014
|
||
New restaurants
|
$
|
15,428
|
|
Acquisition of franchise restaurants, net of cash acquired
|
7,958
|
|
|
Restaurant remodels
|
5,604
|
|
|
Restaurant maintenance capital
|
1,768
|
|
|
Investment in technology infrastructure and other
|
1,514
|
|
|
Other
|
71
|
|
|
Net cash used in investing activities
|
$
|
32,343
|
|
Period
(1)
|
|
Total Number of Shares (or Units) Purchases
|
|
Average Price Paid per Share (or Unit)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plan
|
||||
February 24, 2014 - March 23, 2014
|
|
29,081
|
|
$
|
70.87
|
|
|
29,081
|
|
$
|
42,935,671
|
|
March 24, 2014 - April 20, 2014
|
|
79,203
|
|
$
|
68.67
|
|
|
108,284
|
|
$
|
37,496,629
|
|
Pursuant to Publicly Announced Plans or Programs
(2)
|
|
108,284
|
|
$
|
69.26
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
10.1*
|
|
Form of Red Robin Gourmet Burgers, Inc. Second Amended and Restated 2007 Performance Incentive Plan Nonqualified Stock Option Agreement.
|
|
|
|
10.2*
|
|
Form of Red Robin Gourmet Burgers, Inc. Second Amended and Restated 2007 Performance Incentive Plan Restricted Stock Unit Grant Agreement.
|
|
|
|
10.3*
|
|
Form of Red Robin Gourmet Burgers, Inc. Performance Based Cash Award Agreement.
|
|
|
|
31.1
|
|
Rule 13a-14(a) Certification of Chief Executive Officer
|
|
|
|
31.2
|
|
Rule 13a-14(a) Certification of Chief Financial Officer
|
|
|
|
32.1
|
|
Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer
|
|
|
|
|
|
RED ROBIN GOURMET BURGERS, INC.
(Registrant)
|
||
May 23, 2014
|
|
By:
|
|
/s/ Stuart B. Brown
|
(Date)
|
|
|
|
Stuart B. Brown
(Chief Financial Officer)
|
Date of Grant:
|
|
|
Exercise Price Per Share:
|
|
|
Total Number of Shares Granted:
|
|
|
Total Exercise Price:
|
|
|
Expiration Date of Option:
|
|
|
Shares
|
|
Vest Type
|
|
Vest Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Vesting; Limits on Exercise; Incentive Stock Option Status
.
|
•
|
Cumulative Exercisability
. To the extent that the Option is vested and exercisable, the Grantee has the right to exercise the Option (to the extent not previously exercised), and such right shall continue, until the expiration or earlier termination of the Option.
|
•
|
No Fractional Shares
. Fractional share interests shall be disregarded, but may be cumulated.
|
•
|
Nonqualified Stock Option
. The Option is a nonqualified stock option and is not, and shall not be, an incentive stock option within the meaning of Section 422 of the Code.
|
2.
|
Continuance of Employment/Service Required; No Employment/Service Commitment
.
|
3.
|
Method of Exercise of Option
.
|
•
|
a written notice stating the number of shares of Common Stock to be purchased pursuant to the Option or by the completion of such other administrative exercise procedures as the Administrator may require from time to time,
|
•
|
payment in full for the Exercise Price of the shares to be purchased in cash, check or by electronic funds transfer to the Corporation, or (subject to compliance with all applicable laws, rules, regulations and listing requirements and further subject to such rules as the Administrator may adopt as to any non-cash payment) in shares of Common Stock already owned by the Grantee, valued at their Fair Market Value on the exercise date,
provided
,
however
, that any shares initially acquired upon exercise of a stock option or otherwise from the Corporation must have been owned by the Grantee for at least six (6) months before the date of such exercise;
|
•
|
any written statements or agreements required pursuant to Section 8.1 of the Plan; and
|
•
|
satisfaction of the tax withholding provisions of Section 8.5 of the Plan.
|
4.
|
Early Termination/Acceleration of Option
.
|
•
|
other than as expressly provided below in this Section 4.2, (a) the Grantee will have until the date that is 6 months after his or her Severance Date to exercise the Option (or portion thereof) to the extent that it was vested on the Severance Date, (b) the Option, to the extent not vested on the Severance Date, shall terminate on the Severance Date, and (c) the Option, to the extent exercisable for the 6-month period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 6-month period;
|
•
|
if the termination of the Grantee’s employment or services is the result of the Grantee’s death or Total Disability (as defined below), then the Grantee (or his beneficiary or personal representative, as the case may be) will have until the date that is 12 months after the Grantee’s Severance Date to exercise the Option, (b) the Option, to the extent not vested on the Severance Date, shall terminate on the Severance Date, and (c) the Option, to the extent exercisable for the 12-month period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 12-month period;
|
•
|
if the Grantee’s employment or services are terminated by the Corporation or a Subsidiary for Cause (as defined below), the Option (whether vested or not) shall terminate on the Severance Date.
|
(1)
|
has been negligent in the discharge of his or her duties to the Corporation or any of its Subsidiaries, has refused to perform stated or assigned duties or is incompetent in or (other than by reason of a disability or analogous condition) incapable of performing those duties;
|
(2)
|
has been dishonest or committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information; has breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Corporation, any of its Subsidiaries or any affiliate of the Corporation or any of its Subsidiaries; or has been convicted of a felony or misdemeanor (other than minor traffic violations or similar offenses);
|
(3)
|
has materially breached any of the provisions of any agreement with the Corporation, any of its Subsidiaries or any affiliate of the Corporation or any of its Subsidiaries; or
|
(4)
|
has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Corporation, any of its Subsidiaries or any affiliate of the Corporation or any of its Subsidiaries; has improperly induced a vendor or customer to enter into, break or terminate any contract with the Corporation, any of its Subsidiaries or any affiliate of the Corporation or any of its Subsidiaries; or has induced a principal for whom the Corporation, any of its Subsidiaries or any affiliate of the Corporation or any of its Subsidiaries acts as agent to terminate such agency relationship.
|
5.
|
Non-Transferability
.
|
6.
|
Non-Solicitation
.
|
7.
|
Notices
.
|
8.
|
Plan
.
|
9.
|
Entire Agreement
.
|
10.
|
Governing Law
.
|
11.
|
Effect of this Agreement
.
|
12.
|
Section Headings
.
|
Shares
|
|
Vest Date
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative EBITDA
Amount earned in respect of this metric shall equal:
(Target Award * 1/2 * EBIDTA % Payout)
|
|
Average Return on Invested Capital
Amount earned in respect of this metric shall equal:
(Target Award * 1/2 * ROIC % Payout)
|
||||||
|
Cumulative EBITDA for the Performance Period as a Percentage of Target
|
|
EBITDA % Payout *
|
|
|
Average Return on Invested Capital for the Performance Period as a Percentage of Target
|
|
ROIC % Payout *
|
Threshold
|
90.0%
|
|
50.0%
|
|
Threshold
|
89.5%
|
|
0%
|
|
92.0%
|
|
60.0%
|
|
|
91.6%
|
|
20.0%
|
|
94.0%
|
|
70.0%
|
|
|
93.7%
|
|
40.0%
|
|
96.0%
|
|
80.0%
|
|
|
95.8%
|
|
60.0%
|
|
98.0%
|
|
90.0%
|
|
|
97.9%
|
|
80.0%
|
Target
|
100.0%
|
|
100.0%
|
|
Target
|
100.0%
|
|
100.0%
|
|
102.0%
|
|
110.0%
|
|
|
102.1%
|
|
120.0%
|
|
104.0%
|
|
120.0%
|
|
|
104.2%
|
|
140.0%
|
|
106.0%
|
|
130.0%
|
|
|
106.3%
|
|
160.0%
|
|
108.0%
|
|
140.0%
|
|
Maximum
|
108.4%
|
|
180.0%
|
|
110.0%
|
|
150.0%
|
|
|
|
|
|
|
112.0%
|
|
160.0%
|
|
|
|
|
|
|
114.0%
|
|
170.0%
|
|
|
|
|
|
|
116.0%
|
|
180.0%
|
|
|
|
|
|
|
118.0%
|
|
190.0%
|
|
|
|
|
|
Maximum
|
120.0%
|
|
200.0%
|
|
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Red Robin Gourmet Burgers, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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May 23, 2014
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/s/ Stephen E. Carley
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(Date)
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Stephen E. Carley
Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Red Robin Gourmet Burgers, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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May 23, 2014
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/s/ Stuart B. Brown
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(Date)
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|
Stuart B. Brown
Chief Financial Officer
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(a)
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the Quarterly Report on Form 10-Q for the period ended April 20, 2014 of the Company (the "Periodic Report") fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
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(b)
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the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated:
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May 23, 2014
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/s/ Stephen E. Carley
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|
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Stephen E. Carley
Chief Executive Officer
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|
|
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Dated:
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May 23, 2014
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/s/ Stuart B. Brown
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|
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Stuart B. Brown
Chief Financial Officer
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