RED ROBIN GOURMET BURGERS INC

Previous wording

Certain information and statements contained in this report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 codified at Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 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. These statements may be identified, without limitation, by the use of forward-looking terminology such as "anticipate," "assume," "believe," "could," "estimate," "expect," "future," "intend," "may," "plan," "project," "will," "would," and similar expressions. Forward-looking statements in this report relate to, among other things: our business objectives and strategic plans; strategies with respect to financial flexibility and potential capital raising transactions; our refinancing efforts; our financial condition, including working capital, and the ability of our future cash flows from restaurant operations and our borrowing capacity to satisfy our anticipated cash requirements and fund capital expenditures; our expectations about pricing and restaurant operating costs, including labor, food, supplies, and other commodities, as well as interest rates, and our ability to mitigate potential increases in such costs; our expectations about anticipated uses of, and risks associated with, future cash flows, liquidity, capital expenditures, other capital deployment opportunities, and taxes; the seasonality of our business; and our purchase commitments and lease and litigation contingencies and the adequacy of our reserves for legal matters.

Current wording

Certain information and statements contained in this report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 codified at Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 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. These statements may be identified, without limitation, by the use of forward-looking terminology such as "anticipate," "assume," "believe," "could," "estimate," "expect," "future," "intend," "may," "plan," "project," "will," "would," and similar expressions. Forward-looking statements in this report relate to, among other things: our business objectives and strategic plans; strategies with respect to financial flexibility and potential capital raising transactions; our refranchising transactions and initiatives; our refinancing efforts; our financial condition, including working capital, and the ability of our future cash flows from restaurant operations and our borrowing capacity to satisfy our anticipated cash requirements and fund capital expenditures; our expectations about pricing and restaurant operating costs, including labor, food, supplies, and other commodities, as well as interest rates, and our ability to mitigate potential increases in such costs; our expectations about anticipated uses of, and risks associated with, future cash flows, liquidity, capital expenditures, other capital deployment opportunities, and taxes; the seasonality of our business; and our purchase commitments and lease and litigation contingencies and the adequacy of our reserves for legal matters.

Previous wording

Management's Discussion and Analysis of Financial Condition and Results of Operations provides a narrative of our financial performance and condition that should be read in conjunction with the accompanying Condensed Consolidated Financial Statements. References to the first quarter of fiscal 2026 and fiscal 2025 refer to the sixteen weeks ended April 19, 2026 and April 20, 2025, respectively.

Current wording

Management's Discussion and Analysis of Financial Condition and Results of Operations provides a narrative of our financial performance and condition that should be read in conjunction with the accompanying Condensed Consolidated Financial Statements. References to the second quarter of fiscal 2026 and fiscal 2025 refer to the twelve weeks ended July 12, 2026 and July 13, 2025, respectively.

Previous wording

Red Robin Gourmet Burgers, Inc., a Delaware corporation, is the parent company for Red Robin International, Inc., a Nevada corporation, that together with its subsidiaries ("Red Robin," "we," "us," "our," or the "Company"), primarily operates, franchises, and develops casual dining restaurants with 469 locations in North America. As of April 19, 2026, the Company operated 379 Company-owned restaurants located in 39 states. The Company also had 90 franchised restaurants in 13 states and one Canadian province as of April 19, 2026. The Company operated its business as one operating and one reportable segment.

Current wording

Red Robin Gourmet Burgers, Inc., a Delaware corporation, is the parent company for Red Robin International, Inc., a Nevada corporation, that together with its subsidiaries ("Red Robin," "we," "us," "our," or the "Company"), primarily operates, franchises, and develops casual dining restaurants with 465 locations in North America. As of July 12, 2026, the Company operated 375 Company-owned restaurants located in 39 states. The Company also had 90 franchised restaurants in 13 states and one Canadian province as of July 12, 2026. The Company operated its business as one operating and one reportable segment.

Previous wording

Highlights for the Fiscal First Quarter of 2026, Compared to the Fiscal First Quarter of 2025:

Current wording

Results for the Fiscal Second Quarter of 2026, Compared to the Fiscal Second Quarter of 2025:

Previous wording

•Net loss was $2.2 million, compared to net income of $1.2 million last year, a $3.4 million decrease.

Current wording

•Net loss was $1.8 million, compared to net income of $5.2 million last year, a $7.0 million decrease.

Previous wording

(1)Average weekly net sales volumes represents the total restaurant revenue for all Company-owned Red Robin restaurants for each time period presented, divided by the number of operating weeks in the period.

Current wording

(1)Average weekly net sales volumes represent the total restaurant revenue for all Company-owned Red Robin restaurants for each time period presented, divided by the number of operating weeks in the period.

Previous wording

Restaurant revenue, which was comprised primarily of food and beverage sales, decreased $14.7 million, or 3.8%, in the first quarter of fiscal 2026, as compared to the comparable period of fiscal 2025. Comparable restaurant revenue decreased $2.1 million, or 0.6%, inclusive of a 1.6% decrease in guest count, offset in part by a 1.0% increase in average guest check. The non-comparable portion of the decrease in restaurant revenue was $13.4 million, due to the closure of 22 locations since the first quarter of fiscal 2025. The impact of deferred loyalty revenue was an increase of $0.8 million due to increased loyalty program usage.

Current wording

Restaurant revenue, which was comprised primarily of food and beverage sales, decreased $6.7 million, or 2.4%, in the second quarter of fiscal 2026, as compared to the comparable period of fiscal 2025. Comparable restaurant revenue increased $3.6 million, or 1.3%, inclusive of a 0.2% decrease in guest count, offset in part by a 1.5% increase in average guest check. The non-comparable portion of the decrease in restaurant revenue was $9.8 million, due to the closure of 22 locations since the second quarter of fiscal 2025. The impact of deferred loyalty revenue was a decrease of $0.5 million.

Previous wording

Franchise revenue primarily included royalty income and advertising fund contributions. Franchise revenue increased by $0.4 million, or 9.9%, in the first quarter of fiscal 2026 compared to the same period of fiscal 2025, primarily due to an increase in the franchisee contribution rate for marketing programs. Franchise restaurants reported an increase of 2.4% in comparable restaurant revenue in the first quarter of fiscal 2026 compared to the same period in fiscal 2025.

Current wording

Franchise revenue primarily included royalty income and advertising fund contributions. Franchise revenue increased by $0.5 million, or 14.2%, in the second quarter of fiscal 2026 compared to the same period of fiscal 2025, primarily due to an increase in the franchisee contribution rate for marketing programs. Franchise restaurants reported an increase in comparable restaurant revenue in the second quarter of fiscal 2026 compared to the same period in fiscal 2025.

Previous wording

Other revenue increased $0.2 million in the first quarter of fiscal 2026 compared to the same period of fiscal 2025. Theincrease was primarily related to higher gift card breakage in the current year.

Current wording

Other revenue increased $0.2 million and $0.3 million in the second quarter and in the year to date period, respectively, of fiscal 2026 compared to the same periods of fiscal 2025. Theincrease for both periods was primarily related to higher gift card breakage in the current year.

Previous wording

Cost of sales, which was comprised of food and beverage costs, was variable and generally fluctuated with sales volume. Cost of sales as a percentage of restaurant revenue increased 50 basis points in the first quarter of fiscal 2026 as compared to the comparable period in fiscal 2025. Theincrease was primarily driven by an increase in commodity prices in the current year and was partially offset by higher average guest check.

Current wording

Cost of sales, which was comprised of food and beverage costs, was variable and generally fluctuated with sales volume. Cost of sales as a percentage of restaurant revenue increased 20 basis points in the second quarter of fiscal 2026 as compared to the corresponding period of fiscal 2025. Theincrease was primarily driven by commodity price inflation, partially offset by menu pricing, supply chain cost savings, and timing of vendor contributions to support our annual Partner recognition events, which are recorded as a reduction to cost of sales.

Previous wording

Labor costs included restaurant-level hourly wages and management salaries as well as related taxes and benefits. Labor as a percentage of restaurant revenue decreased 140 basis points in the first quarter of fiscal 2026 compared to the same period in fiscal 2025. The decrease was primarily driven by ongoing efforts to increase hourly and management labor efficiency, benefit from menu price increases, and reduced group health insurance claims, partially offset by wage inflation and deleverage from reduced guest counts.

Current wording

Labor costs included restaurant-level hourly wages and management salaries as well as related taxes and benefits. Labor as a percentage of restaurant revenue decreased ten basis points in the second quarter of fiscal 2026 compared to the same period in fiscal 2025. The decrease was primarily driven by improved hourly labor efficiency and the increase in average guest check, partially offset by wage inflation.

Previous wording

Other operating costs included costs such as repair and maintenance costs, restaurant supplies, utilities, restaurant technology, and other miscellaneous costs. Other operating costs as a percentage of restaurant revenue increased 20 basis points in the first quarter of fiscal 2026 compared to the same period in fiscal 2025. The increase was primarily driven by higher restaurant supplies costs.

Current wording

Other operating costs included costs such as repair and maintenance costs, restaurant supplies, utilities, restaurant technology, and other miscellaneous costs. Other operating costs as a percentage of restaurant revenue remained flat in the second quarter of fiscal 2026 compared to the same period in fiscal 2025. This was primarily driven by an increase in average guest check, offset by higher restaurant supplies costs and increased utilities costs.

Previous wording

Occupancy costs included fixed rents, property taxes, common area maintenance charges, general liability insurance, contingent rents, and other property costs. Occupancy costs as a percentage of restaurant revenue in the first quarter of fiscal 2026 increased 20 basis points compared to the same period in fiscal 2025. The increase was primarily due to an increase in general liability insurance claims activity, offset in part by reduced rent associated with the closure of 22 locations since the first quarter of fiscal 2025.

Current wording

Occupancy costs included fixed rents, property taxes, common area maintenance charges, general liability insurance, contingent rents, and other property costs. Occupancy costs as a percentage of restaurant revenue in the second quarter of fiscal 2026 decreased 20 basis points compared to the same period in fiscal 2025. The decrease was primarily driven by reduced rent associated with the closure of 22 locations since the second quarter of fiscal 2025 and an increase in average guest check, offset by higher general liability insurance claim activity.

Previous wording

Depreciation and amortization included depreciation on capital expenditures for restaurants and corporate assets as well as amortization of reacquired franchise rights, leasehold interests, and certain liquor licenses. In the first quarter of fiscal 2026, depreciation and amortization expense as a percen tage of revenue increased 10 basis points compared to the comparable period in fiscal 2025. The increase was primarily due to decreased revenues from restaurant closures.

Current wording

Depreciation and amortization included depreciation on capital expenditures for restaurants and corporate assets as well as amortization of reacquired franchise rights, leasehold interests, and certain liquor licenses. Depreciation and amortization expense as a percen tage of revenue decreased 60 basis points and 20 basis points in thesecond quarter and year to date periods of fiscal 2026, respectively, compared to the corresponding periods in fiscal 2025. The decrease was primarily driven by the suspension of depreciation on assets classified as held for sale, as well as restaurant closures and asset impairments.

Previous wording

General and administrative costs included all corporate and administrative functions. Components of this category include restaurant support center, regional, and franchise support salaries and benefits, travel and meetings, professional and consulting fees, corporate information systems, legal expenses, and office rent. General and administrative costs in the first quarter of fiscal 2026 were $23.1 million, a decrease of $3.9 million compared to the comparable period in fiscal 2025. The decrease was primarily related to a reduction in team member costs associated with lower headcount and timing of corporate events.

Current wording

General and administrative costs included all corporate and administrative functions. Components of this category include restaurant support center, regional, and franchise support salaries and benefits, travel and meetings, professional and consulting fees, corporate information systems, legal expenses, and office rent. General and administrative costs in the second quarter of fiscal 2026 were $17.6 million, an increase of $0.2 million compared to the comparable period in fiscal 2025. The increase was primarily driven by liability classified award stock-based compensation expense and the timing of corporate events, partially offset by a reduction in team member costs associated with lower headcount.

Previous wording

Selling costs were comprised of all marketing and advertising costs. Selling costs in the first quarter of fiscal 2026 were $13.2 million, an increase of $3.9 million compared to the comparable period in fiscal 2025. The increase was primarily driven by paid media spend in the current fiscal quarter as we continue to support our ongoing marketing strategy.

Current wording

Selling costs were comprised of all marketing and advertising costs. Selling costs in the second quarter and year to date periods of fiscal 2026 were $10.4 million and $23.6 million, respectively, representing an increase of $4.0 million and $7.9 million compared to the corresponding periods in fiscal 2025. The increase in both periods was primarily driven by paid media spend in the current fiscal quarter as we continue to support our ongoing marketing strategy, partially offset by lower production costs.

Previous wording

Interest expense for the first quarter of fiscal 2026 and fiscal 2025 was $7.8 million and $8.1 million, respectively. The $0.3 million decrease was primarily due to less debt in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025, and partially due to a decrease in the weighted average effective interest rate to 13.4% in the first quarter of fiscal 2026 compared to 14.1% in the first quarter of fiscal 2025. Average outstanding debt was $180.8 million and $187.7 million for the first quarter of fiscal 2026 and fiscal 2025, respectively.

Current wording

Interest expense for the second quarter of fiscal 2026 and fiscal 2025 was $5.7 million and $5.8 million, respectively. The $0.1 million decrease was primarily due to a decrease in the weighted-average effective interest rate to 13.5% in the second quarter of fiscal 2026 compared to 14.3% in the second quarter of fiscal 2025. Average outstanding debt was $178.4 million and $176.2 million for the second quarter of fiscal 2026 and fiscal 2025, respectively.

Previous wording

The taxes recognized in the first quarter of fiscal 2026 and fiscal 2025 were immaterial as the Company has net operating losses and tax credits to reduce current taxes and a full valuation allowance against all deferred taxes, which collectively minimize the taxes paid and recognized.

Current wording

The taxes recognized in the second quarter and year to date periods of fiscal 2026 and fiscal 2025 were immaterial as the Company has net operating losses and tax credits to reduce current taxes and a full valuation allowance against all deferred taxes, which collectively minimize the taxes paid and recognized.

Previous wording

The following table reconciles income (loss) from operations to restaurant level operating profit in thousands and in percent of total revenue for the period presented:

Current wording

The following table reconciles income (loss) from operations to restaurant level operating profit in thousands and, except as noted, in percent of total revenue for the periods presented:

Previous wording

We define EBITDA as net income (loss) before interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA is EBITDA, further adjusted to exclude the impact of non-operating items including changes in estimates, asset impairments, litigation contingencies, gains (losses) on debt extinguishment, restaurant and office closure costs, gains (losses) on restaurant sales, severance and executive transition costs, stock-based compensation expense and other non-cash or discrete items. EBITDA and adjusted EBITDA are supplemental measures of our performance that we believe gives the reader additional insight into the ongoing operational results of the Company.

Current wording

We define EBITDA as net income (loss) before interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA is EBITDA, further adjusted to exclude the impact of non-operating items including changes in estimates, asset impairments, litigation contingencies, gains (losses) on debt extinguishment, restaurant and office closure costs, gains (losses) on restaurant sales, severance and executive transition costs, stock-based compensation expense and other non-cash or discrete items. EBITDA and adjusted EBITDA are supplemental measures of our performance that we believe give the reader additional insight into the ongoing operational results of the Company.

Previous wording

The following table reconciles net income (loss) to adjusted EBITDA in thousands for the period presented:

Current wording

The following table reconciles net income (loss) to adjusted EBITDA in thousands for the periods presented:

Previous wording

(2)Consists of compensation expense associated with stock-based awards including phantom awards that may be settled in stock or cash at the Company’s option and stock appreciation rights, which are settled in cash.

Current wording

(2)Consists of compensation expense associated with stock-based awards including phantom awards that may be settled in stock or cash at the Company’s option and SARs, which are settled in cash.

Previous wording

(3)Dilutive securities were included in the computation of adjusted net income (loss) per share - diluted for the sixteen weeks ended April 19, 2026, because the Company reported an adjusted net income for the period. This differs from the GAAP net income (loss) per share - diluted calculation seen on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as the Company reported a net loss for the sixteen weeks ended April 19, 2026.

Current wording

(1)Dilutive securities were included in the computation of adjusted net income (loss) per share - diluted for the twenty-eight weeks ended July 12, 2026, because the Company reported an adjusted net income for the period. This differs from the GAAP net income (loss) per share - diluted calculation seen on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as the Company reported a net loss for the twenty-eight weeks ended July 12, 2026.

Previous wording

(1)Consists of compensation expense associated with stock-based awards including phantom awards that may be settled in stock or cash at the Company’s option and stock appreciation rights, which are settled in cash.

Current wording

(2)Consists of compensation expense associated with stock-based awards including phantom awards that may be settled in stock or cash at the Company’s option and SARs, which are settled in cash.

Previous wording

(2)Assumed a 26% income tax rate, representing a blended average of federal and state statutory rates.

Current wording

(3)Assumed a 26% income tax rate, representing a blended average of federal and state statutory rates.

Previous wording

Cash and cash equivalents, and restricted cash increased $4.4 million to $33.9 million as of April 19, 2026, from $29.5 million at the beginning of the fiscal year. As of April 19, 2026, the Company had approximately $40.8 million in liquidity, including cash and cash equivalents and $16.5 million available borrowing capacity under our credit facility.

Current wording

Cash and cash equivalents, and restricted cash increased $3.0 million to $32.5 million as of July 12, 2026, from $29.5 million at the beginning of the fiscal year. As of July 12, 2026, the Company had approximately $47.8 million in liquidity, including cash and cash equivalents and $25.0 million available borrowing capacity under our credit facility.

Previous wording

Our primary sources of liquidity were cash flows generated from operating activities and availability under our revolving credit facility, as discussed further below. Our main requirements for liquidity included operating expenses, capital expenditures for restaurant investment, investments in technology, and interest payments on our debt. We have, and in the future may continue to have, negative working capital balances, which is common for many restaurant companies. We can operate with a working capital deficit because cash from restaurant sales is usually received before the related payables for food inventory, supplies, and labor become due.

Current wording

Our primary sources of liquidity were cash flows generated from operating activities, availability under our revolving credit facility, and proceeds from restaurant sales, as discussed further below. Our main requirements for liquidity included operating expenses, capital expenditures for restaurant investment, investments in technology, and interest payments on our debt. We have, and in the future may continue to have, negative working capital balances, which is common for many restaurant companies. We can operate with a working capital deficit because cash from restaurant sales is usually received before the related payables for food inventory, supplies, and labor become due.

Previous wording

Net cash flows provided by operating activities decreased $12.6 million to $7.0 million for the year to date period of fiscal 2026 compared to $19.6 million for the comparable period in fiscal 2025. The decrease in net cash provided by operating activities is primarily attributable to the decrease in working capital.

Current wording

Net cash flows provided by operating activities decreased $15.0 million to $14.5 million for the year to date period of fiscal 2026 compared to $29.5 million for the comparable period in fiscal 2025. The decrease in net cash provided by operating activities is primarily attributable to the decrease in working capital.

Previous wording

Net cash flows used in investing activities was $6.7 million for the year to date period of fiscal 2026, as compared to net cash flows used in investing activities of $6.4 million for the comparable period in fiscal 2025. The $0.3 million increase in cash flows used in investing activities is primarily due to the sale of restaurant property in the year to date period of fiscal 2025, partially offset by lower capital expenditures in fiscal 2026 compared to the year to date period of fiscal 2025.

Current wording

Net cash flows used in investing activities was $6.1 million for the year to date period of fiscal 2026, as compared to net cash flows used in investing activities of $12.4 million for the comparable period in fiscal 2025. The $6.3 million decrease in cash flows used in investing activities is primarily due to lower capital expenditures in fiscal 2026 compared to the year to date period of fiscal 2025.

Previous wording

(2)Investment in technology, infrastructure and other consisted of capital costs related to restaurant technology assets, capital overhead, and other centrally developed assets.

Current wording

(2)Technology, infrastructure and other consisted of capital costs related to restaurant technology assets, capital overhead, and other centrally developed assets.

Previous wording

Net cash flows provided by financing activities was $4.1 million for the year to date period of fiscal 2026, as compared to net cash flows used in financing activities of $19.3 million for the comparable period in fiscal 2025. Cash flows provided by financing activities in the year to date period of fiscal 2026 primarily relate to the net borrowings of debt under our revolving credit facility. Cash flows used in financing activities in the comparable period in fiscal 2025 primarily relate to the paydown of debt with cash flow from operations and the net proceeds from the sale of three restaurant locations.

Current wording

Net cash flows used in financing activities was $5.4 million for the year to date period of fiscal 2026, as compared to net cash flows used in financing activities of $23.0 million for the comparable period in fiscal 2025. Cash flows used in financing activities in the year to date period of fiscal 2026 primarily relate to the net repayments of debt under our revolving credit facility. Cash flows used in financing activities in the comparable period in fiscal 2025 primarily relate to the net repayments of debt under our credit facility with cash flow from operations and the net proceeds from the sale of three restaurant locations.

Previous wording

As of April 19, 2026, the Company's credit facility allowed for up to $225.0 million of borrowings and is comprised of a $25.0 million revolving line of credit and a $200.0 million term loan (collectively, the "Credit Facility"). As of April 19, 2026 and December 28, 2025, the Company had outstanding borrowings of $175.7 million and $170.2 million, respectively, inclusive of $8.5 million and $3.0 million drawn on its revolving line of credit, respectively, under its Credit Facility. In addition, the Company had amounts issued under letters of credit of $9.3 million and $9.3 million as of April 19, 2026 and December 28, 2025, respectively.

Current wording

As of July 12, 2026, the Company's credit facility allowed for up to $225.0 million of borrowings and is comprised of a $25.0 million revolving line of credit and a $200.0 million term loan (collectively, the "Credit Facility"). As of July 12, 2026 and December 28, 2025, the Company had outstanding borrowings of $167.2 million and $170.2 million, respectively, inclusive of $0.0 million and $3.0 million drawn on its revolving line of credit, respectively, under its Credit Facility. In addition, the Company had amounts issued under letters of credit of $9.3 million and $9.3 million as of July 12, 2026 and December 28, 2025, respectively.

Previous wording

The Credit Facility will mature on September 3, 2027. 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. As of April 19, 2026, the Company has fulfilled this obligation for the duration of the Credit Facility via previous principal payments. The Credit Facility's interest rate references the Secured Overnight Financing Rate ("SOFR"), which is an 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.

Current wording

The Credit Facility will mature on September 3, 2027. The term loan requires quarterly principal payments in an aggregate annual amount equal to 1.0% of its original principal amount. As of July 12, 2026, the Company has fulfilled this obligation for the duration of the Credit Facility via previous principal payments. The Credit Facility's interest rate references the Secured Overnight Financing Rate ("SOFR"), which is an 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.