March 5 th, 2018 Raymond James & Associates Institutional Investors Conference

Transcription

1 March 5 th, 2018 Raymond James & Associates Institutional Investors Conference

2 2 Forward-Looking Statements Forward-looking statements in this presentation regarding the Company s strategies including revolutionary and transformational projects, future performance, labor model changes, financial performance trends and projected financial measures, and all other statements that are not historical facts, are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 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 expect, believe, anticipate, intend, plan, project, will or estimate, or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date, and cautions 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 strategic initiatives; the effectiveness of our marketing strategies and initiatives to achieve restaurant sales growth; the cost and availability of key food products, labor, and energy; the ability to achieve anticipated revenue and cost savings from anticipated new technology systems and tools in the restaurants and other initiatives; the ability to develop, test, implement and increase online ordering, to-go services, catering and other off-premise sales; the ability to increase labor productivity through alternative labor models; 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 the Company s 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. This presentation may also contain non-gaap financial information. Management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of the Company s financial performance, identifying trends in results, and providing meaningful period-to-period comparisons. For a reconciliation of non-gaap measures presented in this document, see the Appendix of this presentation or the Schedules to the Q4 press release posted on redrobin.com.

3 3 Our Strategic Priorities Maximize brand equities to ensure a strong foundation Maximize current business model Drives return on existing 566 units Funds Transform and Revolutionize initiatives Rapidly pilot and rollout transformational changes Propels our business forward while feeding the Revolutionize initiatives Creating new ways to access and use existing assets Revolutionize Rapidly Reinvent Red Robin Conceptualize and test revolutionary new approaches Higher risk, higher return Provides next growth model(s) Allows us to become a growth company Transform Maximize and Optimize

4 4 Everyday Value Matters to Our Guests

5 5 And We Are Making Progress Major Casual Dining Chains Value vs. Intent to Recommend 51 Intent to Recommend Top Box % Q4 15 Q3 16 Baseline Source: Technomic, 12 months ending Dec 17 Value Top Box %

6 Continued Improvement in Net Promoter Scores 72 Guest Voice In-Restaurant - RRGB USA CLASSIFIED INTERNAL USE 9.5% % Net Promoter Score % 8.0% 7.5% 7.0% 6.5% Detractors as % Q Q Q Q Q Q Q Q4 NPS Score Detractors (Score %) 6.0%

7 Consistently Outperforming Peers On Traffic 5.0% CLASSIFIED INTERNAL USE 7 4.0% 3.6% 4.0% 3.6% 3.0% 2.0% 2.2% 1.0% 1.2% 1.2% 0.0% -1.0% -0.9% -0.6% -2.0% -1.5% 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 12/31/2017

8 8 And Outperforming Peers on Sales 3.0% 2.5% 2.0% 1.9% 2.3% 2.1% 1.5% 1.0% 0.5% 0.0% -0.5% 0.0% 0.3% -1.0% -0.7% -1.5% -1.4% -1.3% -2.0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 12/31/2017

9 9 Significant Growth in Off-Premise 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% US Comp Locations Off-Premise Sales as a % of Gross F&B Sales 5.4% 5.7% 6.3% 7.0% 7.6% 8.3% 0.0% Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17

10 10 Labor Initiatives Are Landing % of Restaurant Revenue Q4-17 % of Restaurant Revenue Q4-16 Favorable (Unfavorable) Cost of sales 23.7% 22.8% (90 bps) Labor 34.1% 35.1% 100 bps Other operating 13.2% 13.7% 50 bps Occupancy 8.5% 8.7% 20 bps Restaurant Level Operating Profit (1) 20.5% 19.8% 70 bps (1) See Appendix for reconciliation of non-gaap restaurant-level operating profit to net income (loss) 10

11 11 Q4 At-A-Glance 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% 35.5% 35.0% 34.5% 34.0% 33.5% Comparable Restaurant Revenues 1-4.3% 2.7% Q Q % Labor Cost 34.1% Q Q % 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% 20.6% 20.4% 20.2% 20.0% 19.8% 19.6% 19.4% Comparable Restaurant Traffic -2.9% 1.9% Q Q RLOP 2 Margin 19.8% 20.5% Q Q (1) Based on restaurants open a full five quarters for both periods presented. Calculated at constant currency rates. (2) See Appendix for reconciliation of non-gaap Restaurant Level Operating Profit (RLOP) to net income (loss)

12 12 Capital and Coverage Progress ($ in Millions) Capital Expenditures 1 Free Cash Flow 2 $200 $80 $73 $164 $60 $150 $40 $100 $84 $20 $0 $50 -$ $40 $0 -$ $80 -$65 Long Term Debt Lease Adj Leverage Ratio $400 $300 $200 $100 $0 $336 $ x 4.4x 4.3x 4.2x 4.1x 4.0x 3.9x 3.8x 4.4x 4.0x Q Q (1) Excludes an acquisition in the amount of $40 million in (2) Free Cash Flow is a Non-GAAP financial measure calculated as cash flow from operating activities less capital expenditures.

13 13 Maximize & Optimize Existing Assets Pausing traditional unit growth and focused on investments that drive four-wall margins: Value and affordability via $6.99 Tavern menu and bottomless sides to drive traffic Guest facing technology to increase offpremise sales to meet the changing consumer needs Front-of-house technology to increase labor productivity Kitchen equipment to simplify execution

14 14 Transformational Changes New ways to operate within our four walls Catering Self-Delivery Test Investment in Restaurant Technology

15 15 Revolutionary Approaches Focused on becoming a growth company again To be continued

16 CLASSIFIED INTERNAL USE

17 Appendix CLASSIFIED INTERNAL USE 17

18 Restaurant Level Operating Profit Reconciliation to Income from Operations and Net Income (Loss) ($ in thousands) Q Q Restaurant revenue $ 287,924 $ 338,158 Restaurant operating costs (1) : Cost of sales 65,646 80,203 Labor 101, ,286 Other operating 39,319 44,734 Occupancy 24,884 28,626 Restaurant-level operating profit 56,968 69,309 Restaurant-level operating profit margin (2) 19.8% 20.5% Add Franchise royalties, fees, and other revenue 3,535 4,195 Deduct Other operating: Depreciation and amortization 22,117 22,070 General and administrative expenses 19,015 21,874 Selling 11,381 15,243 Pre-opening and acquisition costs 1, Other charges (3) 21,742 5,330 Total other operating 75,288 65,352 Income (loss) from operations (14,785) 8,152 Interest expense, net and other 2,046 2,543 Income tax expense (benefit) (8,079) (3,198) Total other (6,033) (655) Net income (loss) $ (8,752) $ 8,807 CLASSIFIED INTERNAL USE 18 (1) Excluding depreciation and amortization, which is shown separately. (2) Calculated as a percent of restaurant revenue. (3) Certain amounts presented in prior periods have been reclassified to conform with the current period presentation. See Note 3 of the Notes to Consolidated Financial Statements in the 2017 Form 10-K for an explanation of Other charges.