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Item 1. Financial Statements

2025-08-14 compared with 2025-05-29 · 109 added, 56 removed, 345 unchanged (32% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(in thousands, except for per share amounts) July 13, 2025 December 29, 2024

Current assets:

Cash and cash equivalents $ 24,370 $ 30,651

Accounts receivable, net 13,100 19,688

Accounts receivable and other, net

12,718 19,688

Inventories 26,295 26,737

27 unchanged sentences

22,050 shares issued;

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

17,886 and 17,403 shares outstanding as of July 13, 2025 and December 29, 2024

Preferred stock, $ 0.001 par value:

3,000 shares authorized;

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

no shares issued and outstanding as of July 13, 2025 and December 29, 2024

Treasury stock 4,164 and 4,647 shares, at cost, as of July 13, 2025 and December 29, 2024

( 147,645 ) ( 164,937 )

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Sixteen Weeks Ended

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

Twelve Weeks Ended Twenty-Eight Weeks Ended

(in thousands, except for per share amounts) July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024

Restaurant revenue $ 279,305 $ 294,457 $ 665,115 $ 673,025

9 unchanged sentences

Depreciation and amortization 11,579 13,402 27,013 31,556

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

General and administrative (includes $ 1,489 ;

and $ 3,029 of stock-based compensation)

17,418 16,612 44,408 42,454

Selling 6,350 12,040 15,726 25,587

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

Other charges (gains), net (includes $( 3,868 );

and $ 50 of stock-based compensation)

( 256 ) 2,931 420 ( 1,045 )

7 unchanged sentences

Income tax provision (benefit)

( 97 ) ( 40 ) ( 99 ) 141

Net income (loss) $ 3,993 $ ( 9,489 ) $ 5,242 $ ( 18,949 )

23 unchanged sentences

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

Issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 148 ) 5,299 ( 5,069 ) — — 230

Non-cash stock compensation — — — — ( 2,454 ) — — ( 2,454 )

Net income (loss) — — — — — — 3,993 3,993

Balance, July 13, 2025 22,050 $ 22 4,164 $ ( 147,645 ) $ 216,757 $ ( 60 ) $ ( 147,717 ) $ ( 78,643 )

Common Stock Treasury Stock Accumulated

7 unchanged sentences

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

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

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

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

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 income (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 )

See Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Sixteen Weeks Ended

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

Twenty-Eight Weeks Ended

(in thousands) July 13, 2025 July 14, 2024

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization 27,013 31,556

Asset impairment 720 1,128

Non-cash other gains, net

1 unchanged sentence

Stock-based compensation expense ( 89 ) 3,046

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

Deferred financing costs and other, net

Gain on sale of restaurant property

( 1,137 ) ( 7,425 )

Other, net 2,488 1,074

Changes in operating assets and liabilities:

Accounts receivable 6,588 7,641

Accounts receivable and other, net

Inventories 43 ( 492 )

7 unchanged sentences

Purchases of property, equipment, and intangible assets ( 18,500 ) ( 13,856 )

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

Net proceeds from sale of property, equipment, and other 6,118 23,271

Net cash provided by (used in) investing activities

( 12,382 ) 9,415

Cash flows from financing activities:

4 unchanged sentences

Repayments of insurance premium financing

( 2,673 ) ( 2,062 )

Proceeds (uses) from other financing activities, net

15 unchanged sentences

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

As of July 13, 2025, the Company owned and operated 397 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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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:

Our current, prior, and upcoming fiscal year periods, period end dates, and number of weeks included in each period 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 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.

We made adjustments to the Condensed Consolidated Statements of Cash Flows to include income tax receivable within accounts receivable and other, net, to net borrowings with repayments on revolving credit facilities, and to separately disclose repayments of insurance premium financing.

We have also 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.

Additionally, we have made an adjustment to the presentation of the components of Other charges (gains), net, found in Note 5.

to include lease remeasurement gains and losses within Asset impairment and restaurant closure costs, net.

Lease remeasurement gains and losses were previously included within Asset disposal and other, net.

Recently Issued and Recently Adopted Accounting Standards

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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.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, to provide a practical expedient and an accounting policy election related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606.

The amendments are effective for annual reporting periods beginning after

December 15, 2025, and interim reporting periods within those annual reporting periods.

The Company is evaluating the impact of the adoption of Update 2025-05 to the consolidated financial statements.

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.

Recently Issued Tax Legislation

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and the restoration of favorable tax treatment for specific business provisions.

The legislation has multiple effective dates, with some provisions taking effect in 2025 and others phased in through 2027.

In accordance with ASC 740, the effects of changes in tax rates and laws are recognized in the period in which the legislation is enacted.

While the Company does not currently anticipate a material impact on the consolidated financial statements, Management is evaluating its potential effects.

Disaggregation of revenue

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

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024

Restaurant revenue $ 279,305 $ 294,457 $ 665,115 $ 673,025

5 unchanged sentences

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

April 20, 2025 December 29, 2024

July 13, 2025 December 29, 2024

Unearned gift card revenue $ 13,083 $ 24,333

3 unchanged sentences

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):

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024

Gift card revenue $ 1,812 $ 1,910 $ 12,516 $ 14,539

2 unchanged sentences

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

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024

Unearned Royalty revenue, beginning balance

2 unchanged sentences

Revenue recognized (1)

( 1,813 ) ( 6,943 ) ( 2,584 ) ( 8,744 )

Unearned Royalty revenue, ending balance

$ 3,032 $ 1,804 $ 3,032 $ 1,804

(1) Restaurant revenue includes a credit of approximately $ 6.4 million related to the transition to the new Royalty program in the second quarter of fiscal 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 Statements of Operations and Comprehensive Income (Loss) as follows (in thousands):

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024

Operating lease cost $ 16,985 $ 17,412 $ 40,005 $ 40,418

5 unchanged sentences

Total $ 22,077 $ 22,272 $ 51,521 $ 51,606

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

Other Charges (Gains), net, for information regarding restaurant closures, lease remeasurement gains and losses, and the sale-leaseback transaction completed during the twenty-eight weeks ended July 14, 2024.

Earnings (Loss) Per Share

3 unchanged sentences

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 the sixteen week period ended April 21, 2024, all potentially dilutive common shares are considered anti-dilutive.

As the Company was in a net loss position for the twelve and twenty-eight week periods ended July 14, 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):

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024

Basic weighted average shares outstanding 17,799 15,680 17,655 15,608

4 unchanged sentences

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

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024

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

Restaurant closure costs, net 210 175

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

Asset impairment and restaurant closure costs, net ( 1,615 ) 1,551 ( 1,405 ) ( 398 )

Severance and executive transition (includes $( 3,868 );

and $ 50 of stock-based compensation)

459 137 1,339 1,082

Litigation contingencies 11 356 23 776

3 unchanged sentences

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 year to date period 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 repay long-term debt.

During the year to date period 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.

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

Asset Impairment and Restaurant Closure Costs, net

During the second quarter and year to date periods of fiscal 2025, the Company recognized $ 1.1 million and $ 2.1 million, respectively, of rent and other costs associated with approximately ten closed locations.

In addition, the Company recognized non-cash impairment charges of $ 0.7 million in the second quarter and year to date periods of fiscal 2025, related to restaurant closures.

These charges were offset by net lease remeasurement gains of $ 3.5 million and $ 4.2 million in the second quarter and year to date periods of fiscal 2025, respectively, related to early lease terminations and other modifications to lease terms.

During the second quarter and year to date periods of fiscal 2024, the Company recognized $ 0.4 million and $ 0.6 million, respectively, of rent and other costs associated with approximately twelve closed locations.

In addition, the Company recognized non-cash impairment charges of $ 1.1 million in the second quarter and year to date periods of fiscal 2024, related to restaurant closures.

These charges were offset by net lease remeasurement gains of $ 0.0 million and $ 2.1 million in the second quarter and year to date periods of fiscal 2024, respectively, related to early lease terminations and other modifications to lease terms.

Severance and Executive Transition

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.

During the second quarter and year to date periods of fiscal 2025, the Company recorded approximately $ 3.1 million and $ 4.2 million, respectively, in executive severance and transition costs associated with changes in executive leadership positions.

These charges were offset in part by a stock-based compensation benefit of $ 3.9 million and $ 4.1 million, respectively, related to the forfeiture of unvested stock-based compensation by executive leadership.

In addition, the Company incurred severance costs primarily related to a reduction in force of Team Members of approximately $ 1.3 million during the second quarter of fiscal 2025.

During the second quarter and year to date periods of fiscal 2024, the Company incurred severance costs of $ 0.1 million and $ 1.1 million, respectively, primarily associated with a reduction in force of Team Members.

As of July 13, 2025, $ 4.3 million is included in Accrued payroll and payroll related liabilities in the condensed consolidated balance sheet related to the reduction in force and executive transition costs described above.

Asset Disposal and Other

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

Borrowings as of July 13, 2025 and December 29, 2024 are summarized below (in thousands):

July 13, 2025 Variable

Interest Rate December 29, 2024 Variable

9 unchanged sentences

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").

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

The borrower maintains the option to increase the Credit Facility in the future, subject to lenders’ participation, by up to an additional $ 40.0 million in the aggregate on the terms and conditions set forth in the Credit Agreement.

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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 July 13, 2025, the Company had outstanding borrowings under the Credit Facility of $ 163.1 million, including $ 2.5 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.

In addition, the Company had amounts issued under letters of credit of $ 8.8 million and $ 8.5 million as of July 13, 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.

20 unchanged sentences

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

April 20, 2025 Level 1 Level 2 Level 3

July 13, 2025 Level 1 Level 2 Level 3

Investments in rabbi trust $ 1,908 $ 1,908 $ — $ —

7 unchanged sentences

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 second quarter of fiscal 2025, we impaired long-lived assets at one restaurant location with a carrying value of approximately $ 0.7 million.

We determined the fair value of these long-lived assets to be nil , resulting in a $ 0.7 million impairment charge and no decrease in the location's right of use assets.

During the second quarter of fiscal 2024, we impaired long-lived assets at two restaurant locations that we closed during the quarter with a carrying value of approximately $ 3.1 million.

We determined the fair value of these long-lived assets to be $ 0.9 million as a result of the closures, resulting in a $ 1.1 million impairment charge and a $ 1.1 million decrease in right of use assets due to remeasurement.

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 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.

As of July 13, 2025, the fair value of the Credit Facility was approximately $ 164.2 million and the principal amount carrying value was $ 169.2 million.

The Credit Facility term loan is reported net of $ 6.1 million in unamortized discount and debt issuance costs in the Condensed Consolidated Balance Sheet as of July 13, 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.

6 unchanged sentences

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

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.

As of July 13, 2025, we had reserves of $ 3.6 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.

3 unchanged sentences

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.

As of July 13, 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 $ 140.9 million.

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

The Company has potential contingent lease liability for lease payments related to certain franchisees’ lease arrangements.

The maximum amount of potential future payments under the potential contingent lease liability was $ 3.4 million and $ 3.8 million as of July 13, 2025 and December 29, 2024, respectively.

The Company does not believe these arrangements have or are likely to have a material effect on its results of operations, financial condition, revenues or expenses, capital expenditures or liquidity.

Segment Reporting

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

In accordance with ASC 820 - 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.

8 unchanged sentences

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

Sixteen Weeks Ended

April 20, 2025 April 21, 2024

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024

Restaurant revenue $ 279,305 $ 294,457 $ 665,115 $ 673,025

15 unchanged sentences

Segment net income (loss) $ 3,993 $ ( 9,489 ) $ 5,242 $ ( 18,949 )

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

(1) Other segment items consists primarily of other charges (gains).

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