RED ROBIN GOURMET BURGERS INC 10-Q

ITEM 1. Financial Statements (unaudited) RED ROBIN GOURMET BURGERS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except for per share amounts) July 13, 2025 December 29, 2024 Assets: Current assets: Cash and cash equivalents $ 24,370 $ 30,651 Accounts receivable and other, net 12,718 19,688 Inventories 26,295 26,737 Prepaid expenses and other current assets 12,102 13,608 Restricted cash 9,173 8,750 Total current assets 84,658 99,434 Property and equipment, net 173,822 181,224 Operating lease assets, net 306,519 331,617 Intangible assets, net 10,024 11,064 Assets held for sale — 4,313 Other assets, net 11,885 13,662 Total assets $ 586,908 $ 641,314 Liabilities and stockholders ' equity: Current liabilities: Accounts payable $ 28,476 $ 29,783 Accrued payroll and payroll-related liabilities 41,724 39,672 Unearned revenue 16,115 27,083 Current portion of operating lease liabilities 51,086 50,083 Accrued liabilities and other 47,580 42,931 Total current liabilities 184,981 189,552 Long-term debt 163,079 181,641 Long-term portion of operating lease liabilities 309,034 345,635 Other non-current liabilities 8,457 8,755 Total liabilities 665,551 725,583 Commitments and contingencies (see Note 8. Commitments and Contingencies) Stockholders' equity (deficit): Common stock; $ 0.001 par value: 45,000 shares authorized; 22,050 shares issued; 17,886 and 17,403 shares outstanding as of July 13, 2025 and December 29, 2024 22 22 Preferred stock, $ 0.001 par value: 3,000 shares authorized; 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 ) Paid-in capital 216,757 233,667 Accumulated other comprehensive loss, net of tax ( 60 ) ( 62 ) Accumulated deficit ( 147,717 ) ( 152,959 ) Total stockholders' equity (deficit) ( 78,643 ) ( 84,269 ) Total liabilities and stockholders' equity (deficit) $ 586,908 $ 641,314 See Notes to Condensed Consolidated Financial Statements 1 Table of Contents RED ROBIN GOURMET BURGERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) 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 Revenues: Restaurant revenue $ 279,305 $ 294,457 $ 665,115 $ 673,025 Franchise revenue 3,186 4,287 7,675 9,628 Other revenue 1,212 1,410 3,265 6,042 Total revenues 283,703 300,154 676,055 688,695 Costs and expenses: Restaurant operating costs (excluding depreciation and amortization shown separately below): Cost of sales 65,159 69,444 153,186 159,653 Labor 99,709 113,908 242,767 262,866 Other operating 49,600 51,783 117,132 118,273 Occupancy 24,329 24,595 56,526 56,023 Depreciation and amortization 11,579 13,402 27,013 31,556 General and administrative (includes $ 1,489 ; $ 1,839 ; $ 4,078 ; 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 $( 3,868 ); $ 16 ; $( 4,093 ); and $ 50 of stock-based compensation) ( 256 ) 2,931 420 ( 1,045 ) Total costs and expenses 273,888 304,715 657,178 695,367 Income (loss) from operations 9,815 ( 4,561 ) 18,877 ( 6,672 ) Other expense (income): Interest expense 5,849 5,107 13,915 12,587 Interest (income) and other, net 70 ( 139 ) ( 181 ) ( 451 ) Income (loss) before income taxes 3,896 ( 9,529 ) 5,143 ( 18,808 ) Income tax provision (benefit) ( 97 ) ( 40 ) ( 99 ) 141 Net income (loss) $ 3,993 $ ( 9,489 ) $ 5,242 $ ( 18,949 ) Net income (loss) per share: Basic $ 0.22 $ ( 0.61 ) $ 0.30 $ ( 1.21 ) Diluted $ 0.21 $ ( 0.61 ) $ 0.28 $ ( 1.21 ) Weighted average shares outstanding: Basic 17,799 15,680 17,655 15,608 Diluted 18,925 15,680 18,598 15,608 Other comprehensive income (loss): Foreign currency translation adjustment $ — $ 4 $ 2 $ ( 14 ) Other comprehensive income (loss), net of tax — 4 2 ( 14 ) Total comprehensive income (loss) $ 3,993 $ ( 9,485 ) $ 5,244 $ ( 18,963 ) See Notes to Condensed Consolidated Financial Statements. 2 Table of Contents RED ROBIN GOURMET BURGERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ' EQUITY (DEFICIT) (Unaudited) Common Stock Treasury Stock Accumulated Other Comprehensive Loss, net of tax Paid-in Capital Accumulated Deficit (in thousands) Shares Amount Shares Amount Total Balance, December 29, 2024 22,050 $ 22 4,647 $ ( 164,937 ) $ 233,667 $ ( 62 ) $ ( 152,959 ) $ ( 84,269 ) 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 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 ) 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 ) 3 Table of Contents Common Stock Treasury Stock Accumulated Other Comprehensive Loss, net of tax Paid-in Capital Accumulated Deficit (in thousands) Shares Amount Shares Amount Total Balance, December 31, 2023 20,449 $ 20 4,921 $ ( 174,702 ) $ 229,680 $ ( 22 ) $ ( 75,418 ) $ ( 20,442 ) 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 income (loss) — — — — — — ( 9,460 ) ( 9,460 ) 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. 4 Table of Contents RED ROBIN GOURMET BURGERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Twenty-Eight Weeks Ended (in thousands) July 13, 2025 July 14, 2024 Cash flows from operating activities: Net income (loss) $ 5,242 $ ( 18,949 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 27,013 31,556 Asset impairment 720 1,128 Non-cash other gains, net ( 3,926 ) 539 Stock-based compensation expense ( 89 ) 3,046 Gain on sale of restaurant property ( 1,137 ) ( 7,425 ) Other, net 2,488 1,074 Changes in operating assets and liabilities: Accounts receivable and other, net 6,793 8,975 Inventories 43 ( 492 ) Prepaid expenses and other current assets 943 ( 86 ) Operating lease assets, net of liabilities ( 5,614 ) ( 224 ) Trade accounts payable and accrued liabilities 7,050 16,171 Unearned revenue ( 10,968 ) ( 19,364 ) Other operating assets and liabilities, net 953 ( 1,703 ) Net cash provided by operating activities 29,511 14,246 Cash flows from investing activities: Purchases of property, equipment, and intangible assets ( 18,500 ) ( 13,856 ) 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: Net (repayments) borrowings on revolving credit facility ( 17,500 ) — Repayments on term loan ( 2,770 ) ( 21,232 ) Repayments of finance lease obligations ( 517 ) ( 619 ) Repayments of insurance premium financing ( 2,673 ) ( 2,062 ) Proceeds (uses) from other financing activities, net 473 ( 184 ) Net cash used in financing activities ( 22,987 ) ( 24,097 ) Effect of exchange rate changes on cash — ( 2 ) Net change in cash and cash equivalents, and restricted cash ( 5,858 ) ( 438 ) Cash and cash equivalents, and restricted cash, beginning of period 39,401 31,565 Cash and cash equivalents, and restricted cash, end of period $ 33,543 $ 31,127 Supplemental disclosure of cash flow information Income taxes paid, net $ ( 79 ) $ 47 Interest paid, net of amounts capitalized $ 11,206 $ 10,767 Accrued purchases of property, equipment, and intangible assets $ 3,550 $ 1,136 Right of use assets obtained in exchange for operating lease obligations $ 8,821 $ 17,832 See Notes to Condensed Consolidated Financial Statements. 5 Table of Contents RED ROBIN GOURMET BURGERS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation and Recent Accounting Pronouncements 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 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. The Company operates its business as one operating and one reportable segment. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Red Robin and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for any interim period are not necessarily indicative of results for the full year. 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 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 each period are summarized in the table below: Periods Period End Date Number of Weeks in Period Current, Prior and Upcoming Fiscal Quarters: First Quarter 2025 April 20, 2025 16 First Quarter 2024 April 21, 2024 16 Second Quarter 2025 July 13, 2025 12 Second Quarter 2024 July 14, 2024 12 Third Quarter 2025 October 5, 2025 12 Third Quarter 2024 October 6, 2024 12 Current and Prior Fiscal Years: Fiscal Year 2025 December 28, 2025 52 Fiscal Year 2024 December 29, 2024 52 Upcoming fiscal year: Fiscal Year 2026 December 27, 2026 52 6 Table of Contents Reclassifications Certain amounts presented have been reclassified to conform with the current period presentation. The reclassifications had no effect on the Company’s consolidated results. 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 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): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. 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. 7 Table of Contents 2. Revenue Disaggregation of revenue In the following table, revenue is disaggregated by type of good or service (in thousands): 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 Franchise revenue 3,186 4,287 7,675 9,628 Gift card breakage 876 1,025 2,581 5,188 Other revenue 336 385 684 854 Total revenues $ 283,703 $ 300,154 $ 676,055 $ 688,695 Contract Liabilities Components of Unearned revenue in the Condensed Consolidated Balance Sheets are as follows (in thousands): July 13, 2025 December 29, 2024 Unearned gift card revenue $ 13,083 $ 24,333 Unearned Royalty revenue 3,032 2,750 Unearned revenue $ 16,115 $ 27,083 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): 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 We recognize Royalty revenue within Restaurant revenue in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when a customer redeems an earned reward. Unearned revenue associated with Royalty is included in Unearned revenue in our Condensed Consolidated Balance Sheets. Changes in our unearned revenue balance related to our Royalty program (in thousands): Twelve Weeks Ended Twenty-Eight Weeks Ended July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024 Unearned Royalty revenue, beginning balance $ 3,604 $ 8,032 $ 2,750 $ 7,509 Revenue deferred 1,241 715 2,866 3,039 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. 8 Table of Contents 3. Leases 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): 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 Finance lease cost: Amortization of right of use assets 216 216 454 504 Interest on lease liabilities 91 106 218 243 Total finance lease cost $ 307 $ 322 $ 672 $ 747 Variable lease cost 4,785 4,538 10,844 10,441 Total $ 22,077 $ 22,272 $ 51,521 $ 51,606 See Note 5. 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. 4. Earnings (Loss) Per Share Basic earnings (loss) per share amounts are calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share amounts are calculated based upon the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. Potentially dilutive shares are excluded from the computation in periods in which they have an anti-dilutive effect. 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 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): 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 Dilutive effect of stock options and awards 1,126 — 944 — Diluted weighted average shares outstanding 18,925 15,680 18,598 15,608 Awards excluded due to anti-dilutive effect on diluted income (loss) per share 2,866 1,996 2,426 1,668 5. Other Charges (Gains), net Other charges (gains), net consisted of the following (in thousands): 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 ) Asset impairment and restaurant closure costs, net ( 1,615 ) 1,551 ( 1,405 ) ( 398 ) Severance and executive transition (includes $( 3,868 ); $ 16 ; $( 4,093 ); and $ 50 of stock-based compensation) 459 137 1,339 1,082 Litigation contingencies 11 356 23 776 Asset disposal and other, net 889 887 1,600 4,920 Other charges (gains), net $ ( 256 ) $ 2,931 $ 420 $ ( 1,045 ) 9 Table of Contents Gain on Sale of Restaurant Property 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 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. 6. Borrowings 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 Interest Rate Revolving line of credit $ 2,500 11.94 % $ 20,000 12.03 % Term loan $ 166,701 12.08 % $ 169,470 12.21 % Total borrowings 169,201 189,470 Less: unamortized debt issuance costs and discounts 6,122 7,829 Long-term debt $ 163,079 $ 181,641 Revolving line of credit unamortized deferred financing charges: $ 986 $ 1,298 Credit Facility 10 Table of Contents 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. 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. The Credit Facility will mature on March 4, 2027. 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. 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 ("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 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 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. Borrowings under the Credit Agreement are secured by substantially all of the assets of the borrower and the guarantors, including the Company, and are available to: (i) refinance certain existing indebtedness of the borrower and its subsidiaries, (ii) pay any fees and expenses in connection with the Credit Agreement, and (iii) provide for the working capital and general corporate requirements of the Company, the borrower and its subsidiaries, including permitted acquisitions and capital expenditures, but excluding restricted payments. On March 4, 2022, Red Robin International, Inc., the Company, and the guarantors also entered into a Pledge and Security Agreement (the “Security Agreement”) granting to the Administrative Agent a first priority security interest in substantially all of the assets of the borrower and the guarantors to secure the obligations under the Credit Agreement. Red Robin International, Inc. as the borrower is obligated to pay customary fees to the agents, lenders and issuing banks under the Credit Agreement with respect to providing, maintaining, or administering, as applicable, the credit facilities. 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 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; increases the aggregate revolving commitments by $ 15.0 million to $ 40.0 million through the end of the third quarter of 2025; removes the variable pricing grid and increases the applicable margin on all term loans and revolving loans that are SOFR-based loans to 7.50 % per annum and that are ABR-based loans to 6.50 % per annum; and adds certain additional reporting requirements. 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. 11 Table of Contents 7. Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The carrying amounts of the Company's cash and cash equivalents, accounts receivable, accounts payable, and current accrued expenses and other liabilities approximate fair value due to the short-term nature or maturity of the instruments. The Company maintains a rabbi trust to fund obligations under a deferred compensation plan. Amounts in the rabbi trust are invested in mutual funds, which are designated as trading securities and carried at fair value and are included in Other assets, net in the accompanying Condensed Consolidated Balance Sheets. Fair market value of mutual funds is measured using level 1 inputs (quoted prices for identical assets in active markets). The following tables present the Company's assets measured at fair value on a recurring basis (in thousands): July 13, 2025 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 1,908 $ 1,908 $ — $ — Total assets measured at fair value $ 1,908 $ 1,908 $ — $ — December 29, 2024 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 1,821 $ 1,821 $ — $ — Total assets measured at fair value $ 1,821 $ 1,821 $ — $ — Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets and liabilities recognized or disclosed at fair value in the Condensed Consolidated Financial Statements on a nonrecurring basis include items such as property, plant and equipment, right of use assets, and other intangible assets. These assets are measured at fair value if determined to be impaired. 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 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. The interest rate on the Credit Facility represents a level 2 fair value input. 12 Table of Contents 8. Commitments and Contingencies Because litigation is inherently unpredictable, assessing contingencies related to litigation is a complex process involving highly subjective judgment about potential outcomes of future events. When evaluating litigation contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the availability of appellate remedies, insurance coverage related to the claim or claims in question, the presence of complex or novel legal theories, and the ongoing discovery and development of information important to the matter. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to possible outcomes, and as such are not meaningful indicators of our potential liability or financial exposure. Accordingly, we review the adequacy of accruals and disclosures each quarter in consultation with legal counsel, and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Condensed Consolidated Financial Statements. However, the ultimate resolution of litigated claims may differ from our current estimates. 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. 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. 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. We ultimately may be subject to greater or less than the accrued amount for this and other matters. 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. 9. Segment Reporting 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. The Company has one operating and one reportable segment: restaurants. 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): 13 Table of Contents Twelve Weeks Ended Twenty-Eight Weeks Ended July 13, 2025 July 14, 2024 July 13, 2025 July 14, 2024 Revenues: Restaurant revenue $ 279,305 $ 294,457 $ 665,115 $ 673,025 Franchise revenue 3,186 4,287 7,675 9,628 Other revenue 1,212 1,410 3,265 6,042 Total revenues 283,703 300,154 676,055 688,695 Costs and expenses: Cost of sales 65,159 69,444 153,186 159,653 Labor 99,709 113,908 242,767 262,866 Other operating 49,600 51,783 117,132 118,273 Occupancy 24,329 24,595 56,526 56,023 General and administrative expenses 17,418 16,612 44,408 42,454 Selling 6,350 12,040 15,726 25,587 Other segment items (1) ( 256 ) 2,931 420 ( 1,045 ) Depreciation and amortization 11,579 13,402 27,013 31,556 Interest expense, net and other 5,919 4,968 13,734 12,136 Income tax expense (benefit) ( 97 ) ( 40 ) ( 99 ) 141 Segment net income (loss) $ 3,993 $ ( 9,489 ) $ 5,242 $ ( 18,949 ) (1) Other segment items consists primarily of other charges (gains). 14 Table of Contents