Red Robin Gourmet Burgers, Inc. (ticker: RRGB, exchange: NASDAQ Global Market (.O))
News Release -
Red Robin Gourmet Burgers Provides Update to Shareholders
GREENWOOD VILLAGE, Colo., Jan 04, 2011 (BUSINESS WIRE) --
Red Robin Gourmet Burgers, Inc., (NASDAQ: RRGB), a casual dining
restaurant chain focused on serving an innovative selection of
high-quality gourmet burgers in a family-friendly atmosphere, today
provided an update to shareholders in an open letter from Pattye L.
Moore, Board Chair, and Stephen E. Carley, Chief Executive Officer.
Dear Fellow Shareholders,
2010 was a period of positive transition for Red Robin, during which we
implemented a number of governance and management changes and we
developed a plan to improve our financial performance. In January, we
separated the roles of Board Chair and CEO, and Pattye L. Moore became
our first independent Board Chair. Then, between March and August, we
added four new independent directors -- Robert B. Aiken, Lloyd L. Hill,
Glenn B. Kaufman and Stuart I. Oran--who collectively bring additional
substantial strategic, financial, restaurant and food-service industry
experience to the board. In addition, Stephen E. Carley joined Red Robin
as our new CEO and fifth new board member in September, bringing with
him more than 28 years of senior management, marketing and operations
expertise in the restaurant, food-service and consumer products
industries. With half of the board changing and a new CEO, the
leadership team at Red Robin was truly transformed.
The newly constituted board of directors met as a complete team for the
first time in late October. Our management team, led by Mr. Carley, in
turn devoted the remainder of the fourth quarter of 2010 to reviewing
the company's brand, financial and operating performance, and developing
an action plan for enhanced growth and profitability in 2011 and beyond.
As the New Year begins, we are now in a position to update you on the
future of our company and the strategic initiatives that we have begun
to implement so that we can resume creating long-term shareholder value.
Our foundation is based on delivering great experiences for our guests,
which will lead to sustainable improved financial results. We are also
focused on disciplined deployment of capital in our growth plans to
optimize the return on our capital investments.
The Red Robin brand has many desirable attributes, including a strong
values-based and guest-focused culture, along with a talented team and a
passionate desire to win. We intend to capitalize on these attributes as
we execute our strategic initiatives going forward. We have identified
and continue to examine opportunities that will drive improved financial
performance through both revenue growth and improved expense management.
We also see opportunities in both the short and long term to optimize
the allocation of our capital. We expect to begin to see the results of
these initiatives which we are calling "Project RED," in 2011. The key
objectives of Project RED include:
Drive increased guest traffic and increase the check average per guest.
Improve guest frequency and enhance sales of new and
limited-time-offer menu items.
Optimize food and beverage revenue mix.
Focus on supply chain, restaurant and administrative expense reduction
opportunities and efficiency improvements that will generate
sustainable savings both in the near-term and longer-term.
Deployment of Capital
Open 10 to 11 new company-owned restaurants in fiscal 2011, so that we
can fully realize the benefits of Project RED initiatives.
Refine longer-term capital deployment opportunities with respect to
unit development, the mix of franchised and company-owned units,
opportunistic share repurchases and infrastructure investment to
optimize our capital returns.
Ensure appropriate capital structure to deliver on operating
strategies, improve returns, and provide the foundation for
longer-term growth in units and profitability, including the
refinancing of our existing debt.
Our analysis of these strategic initiatives is preliminary given the
short tenure of the new board of directors and Mr. Carley in the CEO
role. There is however, a renewed sense of urgency and optimism within
the board and the management team surrounding our business and the
opportunities ahead for the company. We commit to you that in our fourth
quarter earnings conference call in mid-February 2011, we will present
more details on Project RED, which will include additional information
about both our short and long-term strategic plans. Red Robin's board
and management are committed to creating value for our shareholders. We
look forward to regularly updating you on our goals and progress growing
our company in 2011 and beyond.
/s/ Pattye L. Moore
Pattye L. Moore
/s/ Stephen E. Carley
Stephen E. Carley
Chief Executive Officer
About Red Robin Gourmet Burgers, Inc. (NASDAQ:
Red Robin Gourmet Burgers, Inc. (www.redrobin.com),
a casual dining restaurant chain founded in 1969 that operates through
its wholly-owned subsidiary, Red Robin International, Inc., serves up
wholesome, fun, feel-good experiences in a family-friendly environment.
Red Robin(R) restaurants are famous for serving more than two dozen
insanely delicious, high-quality gourmet burgers in a variety of recipes
with Bottomless Steak Fries(R), as well as salads, soups, appetizers,
entrees, desserts, and signature Mad Mixology(R) Beverages. There are 450
Red Robin(R) restaurants located across the United States and Canada,
including company-owned locations and those operating under franchise
Certain information and statements contained in this press release are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements include
statements regarding our expectations, beliefs, intentions, plans,
objectives, goals, strategies, future events or performance and
underlying assumptions and other statements which are other than
statements of historical facts including, without limitation, statements
regarding strategic initiatives and plans, anticipated financial results
and return on capital investments, growth plans, future revenue growth
and expense management and Project "RED" and its objectives . These
statements may be identified, without limitation, by the use of
forward-looking terminology such as "intend," "believe," "continue,"
"expects," "anticipates," "will" or comparable terms or the negative
thereof. All forward-looking statements included in this press release
are based on information available to the Company on the date hereof.
Such statements speak only as of the date hereof and we undertake no
obligation to update any such statement to reflect events or
circumstances arising after the date hereof. These statements are based
on assumptions believed by us to be reasonable, and involve known and
unknown risks and uncertainties that could cause actual results to
differ materially from those described in the statements. These risks
and uncertainties include, but are not limited to, the following: our
ability to open and operate additional restaurants in both new and
existing markets profitably, the anticipated number of new restaurants
and the timing of such openings; estimated costs of opening and
operating new restaurants, including general and administrative,
marketing and, franchise development costs; expected future revenues and
earnings, comparable and non-comparable restaurant sales, results of
operations, and future restaurant growth (both company-owned and
franchised); anticipated restaurant operating costs, including commodity
and food prices, labor and energy costs and selling, general and
administrative expenses and the success of our advertising and marketing
activities and tactics, including the effect on revenue and guest
counts; anticipated advertising costs and plans to include television
advertising to support LTO promotions; our ability to attract new guests
and retain loyal guests; future capital expenditures and the anticipated
amounts of such capital expenditures; our expectation that we will have
adequate cash from operations and credit facility borrowings to reduce
our debt and to meet all future debt service, capital expenditure,
including restaurant development, and working capital requirements;
anticipated compliance with debt covenants; the sufficiency of the
supply of commodities and labor pool to carry on our business;
anticipated restaurant closings and related impairment charges;
anticipated interest and tax expense; expectations regarding competition
and our competitive advantages; and other risk factors described from
time to time in the Company's 10-Q and 10-K filings with the SEC.
SOURCE: Red Robin Gourmet Burgers, Inc.
Don Duffy/Raphael Gross