Red Robin Gourmet Burgers (NASDAQ: RRGB) reported Q4 EPS of ($1.76), $0.66 worse than the analyst estimate of ($1.10). Revenue for the quarter came in at $201.1 million versus the consensus estimate of $230.83 million.

Fourth Quarter 2020 Financial Summary Compared to Fourth Quarter 2019

• Total revenues were $201.1 million, a decrease of 33.6%, primarily due to the impacts of the COVID-19 pandemic including related state and local dining room restrictions;
• Comparable restaurant revenue decreased 29.0%;
• Off-premise sales increased 131.8% and comprised 43.9% of total food and beverage sales, with approximately 80% of off-premise orders driven through digital channels;
• Net loss was $39.3 million compared to net loss of $7.7 million;
• GAAP loss per diluted share was $2.53 compared to GAAP loss per diluted share of $0.60;
• Adjusted loss per diluted share was $1.79 compared to adjusted loss per diluted share of $0.36 (see Schedule I);
• Adjusted EBITDA was a loss of $6.4 million compared to adjusted EBITDA of $26.7 million (see Schedule III); and
• The Company received $49.4 million in cash tax refunds, including interest, and expects to generate approximately $16 million of additional cash refunds within the next twelve months.

Paul J. B. Murphy III, Red Robin’s President and Chief Executive Officer, said, "2020 was a challenging year for our Team Members, for the Communities and Guests that we serve, and for our business. However, not only did Red Robin persevere, we took advantage of the opportunity created by the pandemic to improve our Guest experience and strengthen our enterprise business model. We implemented our Total Guest Experience hospitality model, optimized our management labor structure, simplified our menu, and renegotiated our lease portfolio, all of which will enable us to generate more than 100 basis points of incremental enterprise-level margin improvement when we return to pre-COVID sales volumes. In the first quarter of 2021, we also secured a second amendment to our credit facility, which provides increased near-term flexibility as we continue to de-lever our balance sheet and strategically position the brand for the future."

Murphy concluded, "There is no doubt that increased dining restrictions during the fourth quarter in California, Colorado, Oregon, and Washington had a significant, negative impact to our topline momentum. However, we are bullish as we look to the future reopening of these markets, which represented almost 40% of our 2019 restaurant sales. We are very encouraged by our recent sales trajectory, and as capacity restrictions loosen in these Western markets, we believe our geographic mix will drive sales growth that outpaces the industry. In addition, we are confident that the continued rollout of Donatos®, which we expect will generate over $60 million in annual pizza sales by 2023, higher off-premise sales, record Guest satisfaction scores, and other Company sales drivers will augment our strengthening business results and create and grow long-term value for our shareholders."

Outlook for 2021 and Guidance Policy

The Company provides guidance as it relates to selected information related to the Company's financial and operating performance, and such measures may differ from year to year. Due to the uncertainty caused by the on-going COVID-19 pandemic, limited guidance is being provided for fiscal year 2021.

The Company currently expects the following in 2021:

• We expect that the recovery of our Western markets which represent a meaningful portion of our portfolio, pent up demand for casual dining, higher average Guest check with increasing on-premise dining, and industry restaurant closures will drive significant comparable restaurant revenue growth in 2021.
• We also currently expect that the combination of enterprise pricing, outdoor seating capacity expansions, restoration of full operating hours, and Donatos® expansion will generate incremental growth of mid-to-high single digit comparable restaurant revenue in 2021 beyond the benefits associated with the recovery; and
• We expect capital expenditures of $45 million to $55 million, including continued investment in maintaining our restaurants and infrastructure with maintenance and systems capital, Donatos® expansion to approximately 120 restaurants, digital guest and operational technology solutions, and off-premise execution enhancements.

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