On Feb. 22, Red Robin Gourmet Burgers (NASDAQ:RRGB) released fourth-quarter earnings for the period ended Dec. 31.

  • Revenues grew 40.6%. Restaurant revenue increased 41.8%, but franchise royalties, fees, and rent were flat. The fourth quarter for 2006 contained an extra week.
  • Comparable restaurant sales increased 0.2% for company-owned restaurants. This was driven by a 3.2% increase in the average guest check, which was offset by a 3% decline in guest counts.
  • Restaurant operating margins increased to 21.5%, with a lower cost of sales, labor, and restaurant operating costs partially offset by higher occupancy costs.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006*

Q4 2005*

Change

Sales

$163.8

$116.5

40.6%

Net Profit

$8.8

$5.5

59.4%

EPS

$0.53

$0.33

60.6%

Diluted Shares

16.8

16.7

0.3%

*Figures for Q4 2006 are for 13 weeks, while results for Q4 2005 are for 12 weeks. What a difference an extra week can make!

Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

77.6%

77.5%

0.1

Operating Margin

8.3%

7.5%

0.7

Net Margin

5.4%

4.8%

0.6

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$2.8

$3.3

(17.3%)

Accounts Rec.

$3.3

$3.6

(7.9%)

Inventory

$8.5

$6.5

30.9%



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$24.2

$14.0

72.9%

Long-Term Debt

$112.3

$55.7

101.8%



Learn the ways of the balance sheet.

Cash Flow Highlights

2006

2005

Change

Cash From Ops.

$78.8

$65.3

20.7%

Capital Expenditures

$95.4

$83.8

13.8%

Free Cash Flow

($16.6)

($18.6)

N/A



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