What changed in this filing

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Item 1. Financial Statements

2025-05-29 compared with 2024-11-06 · 138 added, 191 removed, 263 unchanged (56% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for per share amounts) October 6, 2024 December 31, 2023

(in thousands, except for per share amounts) April 20, 2025 December 29, 2024

Current assets:

8 unchanged sentences

Intangible assets, net 10,454 11,064

Assets held for sale — 4,313

Other assets, net 12,663 13,662

Total assets $ 606,229 $ 641,314

Liabilities and stockholders ' equity (deficit):

Liabilities and stockholders ' equity:

Current liabilities:

2 unchanged sentences

Unearned revenue 18,264 27,083

Current portion of operating lease obligations 51,423 43,819

Current portion of operating lease liabilities 51,620 50,083

Accrued liabilities and other 43,899 42,931

1 unchanged sentence

Long-term debt 164,831 181,641

Long-term portion of operating lease obligations 353,435 383,439

Long-term portion of operating lease liabilities 327,850 345,635

Other non-current liabilities 8,418 8,755

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22,050 shares issued;

15,779 and 15,528 shares outstanding as of October 6, 2024 and December 31, 2023

17,738 and 17,403 shares outstanding as of April 20, 2025 and December 29, 2024

Preferred stock, $ 0.001 par value:

3,000 shares authorized;

no shares issued and outstanding as of October 6, 2024 and December 31, 2023

Treasury stock 4,670 and 4,921 shares, at cost, as of October 6, 2024 and December 31, 2023

no shares issued and outstanding as of April 20, 2025 and December 29, 2024

Treasury stock 4,312 and 4,647 shares, at cost, as of April 20, 2025 and December 29, 2024

( 152,944 ) ( 164,937 )

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Twelve Weeks Ended Forty Weeks Ended

(in thousands, except for per share amounts) October 6, 2024 October 1, 2023 October 6, 2024 October 1, 2023

Sixteen Weeks Ended

(in thousands, except for per share amounts) April 20, 2025 April 21, 2024

Restaurant revenue $ 385,809 $ 378,568

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Depreciation and amortization 15,434 18,154

Selling, general, and administrative expenses 26,290 27,961 94,329 89,348

Pre-opening costs — — — 586

Other charges (gains), net 1,532 ( 5,878 ) 487 ( 6,726 )

General and administrative (includes $ 2,589 and $ 1,190 of stock-based compensation)

26,989 25,842

Selling 9,376 13,547

Other charges (gains), net (includes $( 225 ) and $ 33 of stock-based compensation)

676 ( 3,976 )

Total costs and expenses 383,290 390,652

Income (loss) from operations 9,061 ( 2,111 )

Other expense:

Other expense (income):

Interest expense 8,066 7,480

Interest (income) and other, net ( 251 ) ( 312 )

Income (loss) before income taxes

1,246 ( 9,279 )

Loss before income taxes ( 18,974 ) ( 7,883 ) ( 37,782 ) ( 7,043 )

Income tax provision (benefit)

( 98 ) 278 43 453

Net loss $ ( 18,876 ) $ ( 8,161 ) $ ( 37,825 ) $ ( 7,496 )

Loss per share:

Net income (loss) $ 1,249 $ ( 9,460 )

Net income (loss) per share:

Basic $ 0.07 $ ( 0.61 )

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Other comprehensive income (loss), net of tax 2 ( 18 )

Total comprehensive loss $ ( 18,873 ) $ ( 8,173 ) $ ( 37,837 ) $ ( 7,495 )

Total comprehensive income (loss) $ 1,251 $ ( 9,478 )

See Notes to Condensed Consolidated Financial Statements.

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Comprehensive

Income/(Loss),

Loss, net of tax

Capital Accumulated Deficit

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Balance, December 29, 2024 22,050 $ 22 4,647 $ ( 164,937 ) $ 233,667 $ ( 62 ) $ ( 152,959 ) $ ( 84,269 )

Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 84 ) 3,011 ( 3,382 ) — — ( 371 )

Issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 335 ) 11,993 ( 11,752 ) — — 241

Non-cash stock compensation — — — — 2,365 — — 2,365

Net loss — — — — — — ( 9,460 ) ( 9,460 )

Net income (loss) — — — — — — 1,249 1,249

Other comprehensive income (loss), net of tax — — — — — 2 — 2

Balance, April 20, 2025 22,050 $ 22 4,312 $ ( 152,944 ) $ 224,280 $ ( 60 ) $ ( 151,710 ) $ ( 80,412 )

Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 143 ) 5,106 ( 4,919 ) — — 187

Non-cash stock compensation — — — — 1,856 — — 1,856

Net loss — — — — — — ( 9,489 ) ( 9,489 )

Other comprehensive income (loss), net of tax — — — — — 4 — 4

Balance, July 14, 2024 20,449 $ 20 4,694 $ ( 166,585 ) $ 224,425 $ ( 36 ) $ ( 94,367 ) $ ( 36,543 )

Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 24 ) 838 ( 897 ) — — ( 59 )

Non-cash stock compensation — — — — 2,138 — — 2,138

Net loss — — — — — — ( 18,876 ) ( 18,876 )

Other comprehensive income (loss), net of tax — — — — — 3 — 3

Balance, October 6, 2024 20,449 $ 20 4,670 $ ( 165,747 ) $ 225,666 $ ( 33 ) $ ( 113,243 ) $ ( 53,337 )

Common Stock Treasury Stock Accumulated

Comprehensive

Income/(Loss),

Loss, net of tax

Capital Accumulated Deficit

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Balance, December 31, 2023 20,449 $ 20 4,921 $ ( 174,702 ) $ 229,680 $ ( 22 ) $ ( 75,418 ) $ ( 20,442 )

Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 129 ) 5,330 ( 5,106 ) — — 224

Issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 84 ) 3,011 ( 3,382 ) — — ( 371 )

Non-cash stock compensation — — — — 1,190 — — 1,190

Net loss — — — — — — ( 3,256 ) ( 3,256 )

Other comprehensive income (loss), net of tax — — — — — 8 — 8

Net income (loss) — — — — — — ( 9,460 ) ( 9,460 )

Other comprehensive loss, net of tax — — — — — ( 18 ) — ( 18 )

Balance, April 21, 2024 20,449 $ 20 4,837 $ ( 171,691 ) $ 227,488 $ ( 40 ) $ ( 84,878 ) $ ( 29,101 )

Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 250 ) 9,933 ( 8,297 ) — — 1,636

Acquisition of treasury stock — — 382 ( 4,999 ) — — — ( 4,999 )

Non-cash stock compensation — — — — 1,519 — — 1,519

— — — — — — 3,922 3,922

Other comprehensive income (loss), net of tax — — — — — 4 — 4

Balance, July 9, 2023 20,449 $ 20 4,518 $ ( 172,546 ) $ 229,098 $ ( 22 ) $ ( 53,524 ) $ 3,026

Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 31 ) 694 ( 809 ) — — ( 115 )

Acquisition of treasury stock — — 480 ( 4,961 ) — — — ( 4,961 )

Non-cash stock compensation — — — — 1,480 — — 1,480

Net loss — — — — — — ( 8,161 ) ( 8,161 )

Other comprehensive income (loss), net of tax — — — — — ( 12 ) — ( 12 )

Balance, October 1, 2023 20,449 $ 20 4,967 $ ( 176,813 ) $ 229,769 $ ( 34 ) $ ( 61,685 ) $ ( 8,743 )

See Notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Forty Weeks Ended

(in thousands) October 6, 2024 October 1, 2023

Sixteen Weeks Ended

(in thousands) April 20, 2025 April 21, 2024

Cash flows from operating activities:

Net loss $ ( 37,825 ) $ ( 7,496 )

Net income (loss) $ 1,249 $ ( 9,460 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 15,434 18,154

Asset impairment 1,306 7,187

Non-cash other charges (gains), net ( 68 ) ( 1,819 )

Stock-based compensation expense 5,184 5,171

Gain on sale of restaurant property

Non-cash other gains, net

( 172 ) ( 193 )

Other, net 1,574 733

Changes in operating assets and liabilities, net of business acquisition:

Stock-based compensation expense 2,365 1,190

Gain on sale of property ( 1,137 ) ( 7,425 )

Deferred financing costs and other, net

Changes in operating assets and liabilities:

Accounts receivable 6,588 7,641

Income tax receivable 197 100

Inventories ( 518 ) ( 383 )

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Purchases of property, equipment, and intangible assets ( 11,972 ) ( 8,248 )

Net proceeds from sale-leaseback 23,271 58,801

Proceeds from sales of property and equipment and other investing activities 1,016 794

Acquisition of franchised restaurants — ( 3,529 )

Net cash provided by investing activities

Net proceeds from sale of property 5,593 23,393

Net cash provided by (used in) investing activities ( 6,379 ) 15,145

Cash flows from financing activities:

Proceeds from borrowings on revolving credit facilities 50,500 —

Repayments of borrowings on revolving credit facilities ( 30,500 ) ( 15,000 )

Repayments of borrowings on term loan ( 21,232 ) ( 9,857 )

Net (repayments) borrowings on revolving credit facility

Repayments on term loan

( 2,770 ) ( 21,232 )

Repayments of finance lease obligations ( 251 ) ( 291 )

Purchase of treasury stock — ( 9,960 )

Debt issuance costs ( 2,726 ) —

(Uses) Proceeds from other financing activities, net ( 3,098 ) 1,744

Repayments of insurance premium financing

Proceeds (uses) from other financing activities, net

Net cash used in financing activities ( 19,308 ) ( 21,894 )

Effect of exchange rate changes on cash 2 2

Net change in cash and cash equivalents, and restricted cash ( 6,111 ) 6,987

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Supplemental disclosure of cash flow information

Income tax paid, net $ 69 $ 210

Income taxes paid, net $ 77 $ 146

Interest paid, net of amounts capitalized $ 5,734 $ 5,708

Accrued purchases of property, equipment, and intangible assets

$ 2,461 $ 1,737

Right of use assets obtained in exchange for operating lease obligations $ 3,561 $ 15,951

Right of use assets obtained in exchange for finance lease obligations $ — $ 81

See Notes to Condensed Consolidated Financial Statements.

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Red Robin Gourmet Burgers, Inc., a Delaware corporation, together with its subsidiaries ("Red Robin" or the "Company"), primarily operates, franchises, and develops full-service restaurants in North America.

As of October 6, 2024, the Company owned and operated 408 restaurants located in 39 states.

As of April 20, 2025, the Company owned and operated 401 restaurants located in 39 states.

The Company also had 90 franchised full-service restaurants in 13 states and one Canadian province.

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The accompanying Condensed Consolidated Financial Statements of Red Robin have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X.

Certain information and footnote disclosures normally included in the Company's annual Condensed Consolidated Financial Statements on Form 10-K have been condensed or omitted.

The Condensed Consolidated Balance Sheet as of December 31, 2023 has been derived from the audited Condensed Consolidated Financial Statements as of that date but does not include all disclosures required for audited annual financial statements.

For further information, please refer to and read these interim Condensed Consolidated Financial Statements in conjunction with the Company's audited Condensed Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 28, 2024.

Our current, prior, and upcoming year periods, period end dates, and number of weeks included in the period are summarized in the table below:

Certain information and footnote disclosures normally included in the Company's annual Consolidated Financial Statements on Form 10-K have been condensed or omitted.

The Condensed Consolidated Balance Sheet as of December 29, 2024 has been derived from the audited Consolidated Financial Statements as of that date but does not include all disclosures required for audited annual financial statements.

For further information, please refer to and read these interim Condensed Consolidated Financial Statements in conjunction with the Company's audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2024 filed with the SEC on February 26, 2025.

Our current, prior, and upcoming fiscal year periods, period end dates, and number of weeks included in the periods are summarized in the table below:

Periods Period End Date Number of Weeks in Period

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The reclassifications had no effect on the Company’s consolidated results.

We made adjustments to the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) to disaggregate franchise and other revenue and to disaggregate interest expense and interest income and other, net.

Additionally, we made adjustments to the Condensed Consolidated Statements of Cash Flows to disaggregate borrowings and repayments on revolving credit facilities, repayments on the term loan and finance lease obligations and to reclassify gift card breakage within unearned revenue.

We made adjustments to the Condensed Consolidated Statements of Cash Flows to net borrowings with repayments on revolving credit facilities, to reclassify gift card breakage within unearned revenue, and to include income tax receivable within accounts receivable.

Beginning in the current reporting period, we have revised the presentation of operating expenses in the Condensed Consolidated Statements of Operations to separately disclose Selling expenses and General and administrative expenses.

Previously, these amounts were presented on a combined basis as Selling, general and administrative expenses.

Recently Issued and Recently Adopted Accounting Standards

In December 2023, FASB issued Update 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures which updates income tax disclosures related to the rate reconciliation and requires disclosure of income taxes paid by jurisdiction.

The amendment also provides further disclosure comparability.

The amendment is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied prospectively.

However, retrospective application is permitted.

We do not expect these amended disclosures will have a material impact to the Company's Consolidated Financial Statements or Notes to the Consolidated Financial Statements upon adoption.

In November 2024, the FASB issued Update 2024-03 which expands disclosures about specific expense categories presented on the face of the income statement.

Update 2024-03 is effective for financial statements issued for annual periods beginning after December 15, 2026, with early adoption permitted.

The Company is evaluating the impact of the adoption of Update 2024-03 to the consolidated financial statements.

In December 2023, the FASB issued Update 2023-09 to improve income tax disclosure requirements, primarily related to rate reconciliations and income taxes paid.

Update 2023-09 is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is evaluating the impact of the adoption of Update 2023-09 to the consolidated financial statements.

In November 2023, FASB issued Update 2023-07, Segment Reporting (Topic 280):

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The amendments are effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.

Management adopted this ASU beginning with the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2024 filed with the SEC on February 26, 2025.

We reviewed all other recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a significant impact on the Company's Condensed Consolidated Financial Statements.

Summary of Significant Accounting Policies

Revenue Recognition - Revenues consist of sales from restaurant operations (including third party delivery), franchise revenue, and other revenue including gift card breakage and miscellaneous revenue.

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a restaurant Guest, franchisee, or other customer.

The Company recognizes revenues from restaurant operations when payment is tendered at the point of sale, as the Company's performance obligation to provide food and beverage to the customer has been satisfied.

The Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card balances.

We recognize revenue from gift cards as either:

(i) Restaurant revenue, when the Company's performance obligation to provide food and beverage to the customer is satisfied upon redemption of the gift card, or (ii) gift card breakage, as discussed below.

Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote and the Company determines there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction.

The determination of the gift card breakage rate is based upon the Company's specific historical redemption patterns.

The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage on a pro rata basis over the period of estimated redemption.

During the second quarter of fiscal 2024, we re-launched our Red Robin Royalty TM program (“Royalty”).

Under the re-launched program, Royalty members generally earn points for every dollar spent.

We may also periodically offer promotions, which typically provide the customer with the opportunity to earn bonus points or other rewards.

Upon reaching certain point thresholds, Royalty members earn rewards that may be redeemed for food and beverage items.

Earned rewards generally expire 90 days after they are issued, and points generally expire if a qualifying purchase is not made within 365 days of the last purchase.

We defer revenue based on the estimated stand-alone selling price of points or rewards earned by customers as each point or reward is earned, net of points or rewards we do not expect to be redeemed.

Our estimate of points and rewards expected to be redeemed is based on historical Company-specific data.

We evaluate Royalty redemption rates annually, or more frequently as circumstances warrant.

Estimating future redemption rates requires judgment based on current and historical trends, and actual redemption rates may vary from our estimates.

Revenues we receive from our franchise arrangements include sales-based royalties, advertising fund contributions, and franchise fees.

Red Robin franchisees are required to remit 4.0 % to 5.0 % of their revenues as royalties to the Company and contribute up to 3 % of revenues to two national advertising funds.

The Company recognizes these sales-based royalties and advertising fund contributions as the underlying franchisee sales occur.

Contributions to these Advertising Funds from franchisees are recorded as revenue under Franchise revenue in the Consolidated Statements of Operations and Comprehensive Income (Loss) in accordance with ASC Topic 606, Revenue from Contracts with Customers .

The Company typically grants franchise rights to franchisees for a term of 20 years, with the right to extend the term for an additional 10 years if various conditions are satisfied by the franchisee.

Other revenue consists of gift card breakage, licensing income, and recycling income.

Disaggregation of revenue

In the following table, revenue is disaggregated by type of good or service (in thousands):

Twelve Weeks Ended Forty Weeks Ended

October 6, 2024 October 1, 2023 October 6, 2024 October 1, 2023

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Restaurant revenue $ 385,809 $ 378,568

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Components of Unearned revenue in the Condensed Consolidated Balance Sheets are as follows (in thousands):

October 6, 2024 December 31, 2023

April 20, 2025 December 29, 2024

Unearned gift card revenue $ 14,660 $ 24,333

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Revenue recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the redemption and breakage of gift cards that were included in the liability balance at the beginning of the fiscal year was as follows (in thousands):

Forty Weeks Ended

October 6, 2024 October 1, 2023

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Gift card revenue $ 10,704 $ 12,629

2 unchanged sentences

Changes in our unearned revenue balance related to our Royalty program (in thousands):

Twelve Weeks Ended Forty Weeks Ended

October 6, 2024 October 1, 2023 October 6, 2024 October 1, 2023

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Unearned Royalty revenue, beginning balance

2 unchanged sentences

Revenue recognized ( 771 ) ( 1,802 )

( 385 ) ( 1,188 ) ( 9,129 ) ( 5,435 )

Unearned Royalty revenue, ending balance

$ 3,604 $ 8,032

(1) Restaurant revenue includes an approximately $ 6.4 million credit related to the transition to the new Royalty program in the second quarter of 2024, primarily due to the cancellation of unused points that were earned more than 365 days prior to the launch of the new program.

The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in Occupancy on our Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) as follows (in thousands):

Twelve Weeks Ended Forty Weeks Ended

October 6, 2024 October 1, 2023 October 6, 2024 October 1, 2023

The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in Occupancy on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as follows (in thousands):

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Operating lease cost $ 23,020 $ 23,007

5 unchanged sentences

Total $ 29,444 $ 29,335

See Note 5, Other Charges (Gains), net , for information regarding the sale-leaseback transactions completed during the quarter and year to date periods ended October 6, 2024 and October 1, 2023, respectively.

Other Charges (Gains), net, for information regarding the sale-leaseback transaction completed during the fiscal quarter ended April 21, 2024.

Earnings (Loss) Per Share

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Diluted earnings per share reflects the potential dilution that could occur if holders of options exercised their options into common stock.

As the Company was in a net loss position for both the quarter to date and year to date periods ended October 6, 2024, all potentially dilutive common shares are considered anti-dilutive.

As the Company was in a net loss position for the sixteen week period ended April 21, 2024, all potentially dilutive common shares are considered anti-dilutive.

The Company uses the treasury stock method to calculate the effect of outstanding stock options and awards.

Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands):

Twelve Weeks Ended Forty Weeks Ended

October 6, 2024 October 1, 2023 October 6, 2024 October 1, 2023

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Basic weighted average shares outstanding 17,546 15,554

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Other charges (gains), net consisted of the following (in thousands):

Twelve Weeks Ended Forty Weeks Ended

October 6, 2024 October 1, 2023 October 6, 2024 October 1, 2023

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Gain on sale of restaurant property $ ( 1,137 ) $ ( 7,425 )

$ — $ ( 14,883 ) $ ( 7,425 ) $ ( 29,413 )

Restaurant closure costs, net 210 175

Severance and executive transition (includes $( 225 ) and $ 33 of stock-based compensation)

Litigation contingencies 12 420

271 3,600 1,047 9,140

Restaurant closure costs (gains), net

( 175 ) ( 91 ) 422 1,546

Severance and executive transition

22 341 1,104 3,195

Asset impairment

178 4,800 1,306 7,187

Asset disposal and other, net 711 1,909

1,179 277 3,799 1,366

Closed corporate office costs, net of sublease income 57 78 234 253

Other charges (gains), net

$ 676 ( 3,976 )

Gain on Sale of Restaurant Property

During the first quarter of fiscal 2025, the Company sold three restaurant properties for total proceeds of $ 5.8 million that resulted in a gain, net of expenses of $ 1.1 million.

The net proceeds are included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows and were used to pay down long-term debt.

During the first quarter of fiscal 2024, the Company sold ten restaurant properties for total proceeds of $ 23.9 million in a sale-leaseback transaction that resulted in a gain, net of expenses of $ 7.4 million.

During the third quarter of fiscal 2023, the Company sold nine restaurant properties for total proceeds of $ 30.4 million in a sale-leaseback transaction that resulted in a gain, net of expenses of $ 14.9 million.

During the second quarter of fiscal 2023, the Company sold nine restaurant properties for total proceeds of $ 28.5 million in a sale-leaseback transaction that resulted in a gain, net of expenses of $ 14.6 million.

Restaurant Closure Costs, net

Restaurant closure costs (gains) include the ongoing restaurant operating costs for closed Company-owned restaurants and closed restaurant lease termination gains or losses.

The net proceeds are included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows.

Severance and Executive Transition

During the third quarter and year to date periods of fiscal 2024, the Company incurred costs primarily related to a reduction in force of Team Members.

During the third quarter and year to date periods of fiscal 2023, the Company incurred severance and executive transition costs associated with changes in leadership positions.

Asset Impairment

During the third quarter and year to date periods of fiscal 2024, the Company recognized non-cash impairment charges primarily related to the closure of three and five locations, respectively.

During the third quarter and year to date periods of fiscal 2023, the Company recognized non-cash impairment charges primarily related to impairments of long-lived assets at eight and twelve Company-owned locations, respectively.

The Company also recognized non-cash impairment charges related to the closed corporate office during the year to date period of fiscal 2023.

Fair Value Measurements.

During the first quarter of fiscal 2025, the Company incurred severance and executive transition costs primarily related to the departure of certain executive officers, and costs associated with changes in leadership positions.

During the first quarter of fiscal 2024, the Company incurred severance and executive transition costs primarily related to a reduction in force of Team Members and costs associated with changes in leadership positions.

Asset Disposal and Other

Asset disposals and other relate primarily to terminated capital projects, special projects, and initiatives costs.

Borrowings as of October 6, 2024 and December 31, 2023 are summarized below (in thousands):

October 6, 2024 Variable

Asset disposal and other primarily relates to the closure of a corporate office location, asset disposals, strategic projects and other non-recurring items.

Borrowings as of April 20, 2025 and December 29, 2024 are summarized below (in thousands):

April 20, 2025 Variable

Interest Rate December 29, 2024 Variable

7 unchanged sentences

$ 1,119 $ 1,298

Credit Agreement

On March 4, 2022, the Company entered into a credit agreement (the "Credit Agreement") by and among the Company, Red Robin International, Inc., as the borrower, the lenders from time to time party thereto, the issuing banks from time to time party thereto, Fortress Credit Corp., as Administrative Agent and as Collateral Agent and JPMorgan Chase Bank, N.A., as Sole Lead Arranger and Sole Bookrunner.

Credit Facility

On March 4, 2022, the Company replaced its prior amended and restated credit agreement (the "Prior Credit Agreement") with a new credit agreement (the "Credit Agreement") by and among the Company, Red Robin International, Inc., as the borrower, the lenders from time to time party thereto, the issuing banks from time to time party thereto, Fortress Credit Corp., as Administrative Agent and as Collateral Agent and JPMorgan Chase Bank, N.A., as Sole Lead Arranger and Sole Bookrunner.

The five-year $ 240.0 million Credit Agreement provides for a $ 40.0 million revolving line of credit and a $ 200.0 million term loan (collectively, the "Credit Facility").

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The Credit Facility will mature on March 4, 2027.

No amortization is required with respect to the revolving line of credit.

No amortization is required with respect to the revolving Credit Facility.

The term loans require quarterly principal payments in an aggregate annual amount equal to 1.0 % of the original principal amount of the term loan.

Quarterly principal payments are no longer required as a result of the debt repayments from the proceeds of the sale-leaseback transactions.

The Credit Agreement's interest rate references the Secured Overnight Financing Rate ("SOFR"), a new index calculated by short-term repurchase agreements and backed by U.S.

Treasury securities, or the Alternate Base Rate, which represents the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.5 % per annum, or (c) one-month term SOFR plus 1.0 % per annum.

As of October 6, 2024, the Company had outstanding borrowings under the Credit Facility of $ 180.7 million, including $ 20.0 million drawn on its revolving line of credit.

As of December 31, 2023, the Company had outstanding borrowings under the Credit Facility of $ 182.6 million, with no amounts drawn on its revolving line of credit.

In addition, the Company had amounts issued under letters of credit of $ 8.1 million and $ 7.7 million as of October 6, 2024 and December 31, 2023, respectively.

Treasury securities, or the Alternate Base Rate ("ABR"), which represents the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.5 % per annum, or (c) one-month term SOFR plus 1.0 % per annum.

As of April 20, 2025, the Company had outstanding borrowings under the Credit Facility of $ 164.8 million, including $ 5.0 million drawn on its revolving line of credit.

As of December 29, 2024, the Company had outstanding borrowings under the Credit Facility of $ 181.6 million, with $ 20.0 million drawn on its revolving line of credit.

In addition, the Company had amounts issued under letters of credit of $ 8.8 million and $ 8.5 million as of April 20, 2025 and December 29, 2024, respectively.

Red Robin International, Inc., is the borrower under the Credit Agreement, and certain of its subsidiaries and the Company are guarantors of the borrower’s obligations under the Credit Agreement.

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On July 17, 2023, the Company amended the Credit Agreement (the “First Amendment”) to, among other things, remove the previously included $ 50.0 million aggregate cap on sale-leasebacks of Company-owned real property that are permitted under the Credit Agreement, subject to certain conditions set forth in the Credit Agreement.

On August 21, 2024, the Company entered into the second amendment to our Credit Agreement (the “Second Amendment”).

On August 21, 2024, the Company entered into the second amendment to the Credit Agreement (the “Second Amendment”).

The Second Amendment, among other things, provides certain relief from the financial covenant by increasing the required maximum net total leverage ratio beginning in the third quarter of 2024 through the end of the third quarter of 2025;

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and adds certain additional reporting requirements.

In conjunction with the execution of the Second Amendment, the Company paid certain customary amendment fees to the lenders under the credit facility totaling approximately $ 2.9 million.

The Company performed an analysis of the Second Amendment under ASC Topic 470, Debt , and determined that debt modification accounting was appropriate for our term loan and revolving line of credit due to the change in total capacity and the increase in applicable margin interest rates under the new amendment.

During the third quarter of 2024, the Company capitalized $ 2.7 million of the amendment fees as deferred loan fees which will be amortized over the remaining term of the Credit Facility, and expensed the remaining $ 0.2 million of fees.

The summary descriptions of the Credit Agreement, the Security Agreement, the First Amendment, and the Second Amendment, do not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, each of which was filed February 28, 2024, as an exhibit to the Annual Report on Form 10-K, except for the Second Amendment which was filed August 22, 2024 as an exhibit to the Quarterly Report on Form 10-Q for the period ended July 14, 2024.

On November 4, 2024, the Company entered into the third amendment to our Credit Agreement (the "Third Amendment").

Subsequent Event .

On November 4, 2024, the Company entered into the third amendment to the Credit Agreement (the "Third Amendment").

The Third Amendment extended the provisions of the Second Amendment through the end of the first fiscal quarter of 2026.

The summary descriptions of the Credit Agreement, the Security Agreement, the First Amendment, the Second Amendment and the Third Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, each of which was filed February 26, 2025, as an exhibit to the Annual Report on Form 10-K.

Fair Value Measurements

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The following tables present the Company's assets measured at fair value on a recurring basis (in thousands):

October 6, 2024 Level 1 Level 2 Level 3

April 20, 2025 Level 1 Level 2 Level 3

Investments in rabbi trust $ 1,739 $ 1,739 $ — $ —

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During 2025 and 2024, the Company measured non-financial assets for impairment using continuing and projected future cash flows, which were based on significant inputs not observable in the market and thus represented a level 3 fair value measurement.

During the third quarter and year to date periods of fiscal 2024, we impaired long-lived assets at three and five restaurant locations, respectively, with a carrying value of approximately $ 1.9 million and $ 5.0 million, respectively.

We determined the fair value of these long-lived assets to be $ 1.1 million and $ 2.0 million as a result of the closures, resulting in a $ 0.2 million and $ 1.3 million impairment charge and a $ 0.6 million and $ 1.7 million decrease in right of use assets due to remeasurement for the quarter and year to date periods of fiscal 2024, respectively.

During the third quarter and year to date periods of fiscal 2023, we impaired long-lived assets at eight and twelve restaurant locations, respectively.

We also impaired the closed corporate office during the year to date period of 2023.

The carrying value of the assets impaired in the third quarter of 2023 was $ 15.3 million and the carrying value of the assets impaired during the year to date period of 2023 was $ 27.7 million.

We determined the fair value of these long-lived assets to be $ 10.5 million and $ 20.5 million, resulting in a $ 4.8 million and $ 7.2 million impairment charge during the quarter and year to date periods of fiscal 2023, respectively.

Disclosures of Fair Value of Other Assets and Liabilities

The Company's liability under its Credit Facility is carried at historical cost in the accompanying Condensed Consolidated Balance Sheets.

As of October 6, 2024, the fair value of the Credit Facility was approximately $ 178.0 million and the principal amount carrying value was $ 187.9 million.

The Credit Facility term loan is reported net of $ 7.2 million in unamortized discount and debt issuance costs in the Condensed Consolidated Balance Sheet as of October 6, 2024.

As of April 20, 2025, the fair value of the Credit Facility was approximately $ 177.7 million and the principal amount carrying value was $ 171.7 million.

The Credit Facility term loan is reported net of $ 6.9 million in unamortized discount and debt issuance costs in the Condensed Consolidated Balance Sheet as of April 20, 2025.

The carrying value of the Credit Facility was $ 189.5 million and the fair value of the Credit Facility was $ 186.6 million as of December 29, 2024.

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However, the ultimate resolution of litigated claims may differ from our current estimates.

As of October 6, 2024, we had reserves of $ 8.3 million for loss contingencies included within Accrued liabilities and other on our Condensed Consolidated Balance Sheet.

As of April 20, 2025, we had reserves of $ 3.8 million for loss contingencies included within Accrued liabilities and other on our Condensed Consolidated Balance Sheet.

In the normal course of business, there are various claims in process, matters in litigation, administrative proceedings, and other contingencies.

These include employment related claims and class action lawsuits, claims from Guests or Team Members alleging illness, injury, food quality, health, or operational concerns, and lease and other commercial disputes.

To date, none of these claims, certain of which are covered by insurance policies, have had a material effect on the Company.

While it is not possible to predict the outcome of these suits, legal proceedings, and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these matters has been made in the financial statements and that the ultimate resolution of these matters will not have a material adverse effect on our financial position and results of operations.

While it is not possible to predict the outcome of these suits, legal proceedings, and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these matters has been made in the financial statements and that the ultimate resolution of pending or threatened matters will not have a material adverse effect on our financial position and results of operations.

However, a significant increase in the number of these claims, or one or more successful claims resulting in greater liabilities than we currently anticipate, could materially and adversely affect our business, financial condition, results of operations, and cash flows.

As of October 6, 2024, we had non-cancellable purchase commitments primarily related to certain vendors who provide food and beverage and other supplies to our restaurants, for an aggregate of $ 188.1 million.

We ultimately may be subject to greater or less than the accrued amount for this and other matters.

As of April 20, 2025, we had non-cancellable purchase commitments primarily related to certain vendors who provide food and beverage and other supplies to our restaurants, for an aggregate of $ 131.8 million.

We expect to fulfill our commitments under these agreements in the normal course of business, and as such, no liability has been recorded.

Subsequent Event

Subsequent to the end of the third quarter of fiscal 2024, the Company entered into the Third Amendment to our Credit Agreement (the “Third Amendment”).

The Third Amendment amends the Credit Agreement to:

• increase the permitted Maximum Net Total Leverage Ratio beginning in the fourth fiscal quarter of 2025 through the end of the first fiscal quarter of 2026;

• maintain the revolving commitments under the Credit Agreement at $ 40 million through the end of the first fiscal quarter of 2026.

The revolving commitments were previously scheduled to be reduced to $ 25 million at the end of the third fiscal quarter of 2025.

In conjunction with the Third Amendment, the Company paid certain customary amendment fees to the lenders under the credit facility totaling approximately $ 1.6 million, which will be added to the term loan and payable at maturity.

Terms in this section that are capitalized but not defined have the meanings given to them in the Third Amendment.

The summary description of the Third Amendment does not purport to be complete and is qualified in its entirety to the full text of the Third Amendment, which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

Segment Reporting

In accordance with Segment Reporting, the Company uses the management approach for determining its reportable segments.

The management approach is based upon the way that management reviews performance and allocates resources.

The Company has one operating and one reportable segment:

We manage our business activities on a consolidated basis, as Red Robin restaurants all have similar customers, sell similar products, and have a similar process to sell those products.

We primarily derive our revenue in the United States through the sale of food and beverage through its Company-owned locations as well as earn royalties and fees from franchise restaurants.

There have been no material changes to the accounting policies of the restaurant segment, which can be found in the filing of the 2024 Annual Report on Form 10-K for the fiscal year ended December 29, 2024.

Our Chief Operating Decision Maker ("CODM") is our Chief Executive Officer.

The Company measures segment profit using consolidated Net income (loss).

The CODM uses consolidated Net income (loss), as reported on our Condensed Consolidated Statements of Operations and Comprehensive Loss, in deciding whether to reinvest excess cash flow into the restaurant segment or into other parts of the Company.

The CODM does not review assets in evaluating the results of the restaurant segment, and therefore, such information is not presented.

Financial information for the Company's reportable segment is as follows (in thousands):

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Restaurant revenue $ 385,809 $ 378,568

Franchise revenue 4,489 5,341

Other revenue 2,053 4,632

Total revenues 392,351 388,541

Costs and expenses:

Cost of sales 88,028 90,209

Labor 143,058 148,958

Other operating 67,532 66,490

Occupancy 32,197 31,428

General and administrative expenses 26,989 25,842

Selling 9,376 13,547

Other segment items (1)

676 ( 3,976 )

Depreciation and amortization 15,434 18,154

Interest expense, net and other 7,815 7,168

Income tax expense (benefit) ( 3 ) 181

Segment net income (loss) $ 1,249 $ ( 9,460 )

(1) Other segment items consists primarily of other charges (gains) and pre-opening costs.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements