Red Robin Gourmet Burgers (RRGB) 10-Q 18 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	4 Months Ended
	Apr. 17, 2016	May. 16, 2016
Document and Entity Information
Entity Registrant Name	RED ROBIN GOURMET BURGERS INC
Entity Central Index Key	1,171,759
Current Fiscal Year End Date	--12-25
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Apr. 17, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		13,647,035

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Apr. 17, 2016	Dec. 27, 2015
Current assets:
Cash and cash equivalents	$ 25,167	$ 22,705
Accounts receivable, net	15,110	27,760
Inventories	28,679	28,223
Prepaid expenses and other current assets	14,636	18,052
Total current assets	83,592	96,740
Property and equipment, net	657,536	603,686
Goodwill	97,282	81,957
Intangible assets, net	44,799	39,573
Other assets, net	24,660	18,023
Total assets	907,869	839,979
Current liabilities:
Trade accounts payable	21,279	23,392
Construction related payables	36,460	28,692
Accrued payroll and payroll-related liabilities	37,987	47,587
Unearned revenue	34,636	48,392
Accrued liabilities and other	38,515	29,610
Total current liabilities	168,877	177,673
Deferred rent	68,399	66,470
Long-term debt	254,375	202,875
Long-term portion of capital lease obligations	7,257	7,441
Other non-current liabilities	16,628	11,209
Total liabilities	515,536	465,668
Stockholders’ equity:
Common stock, $0.001 par value: 45,000 shares authorized; 17,851 and 17,851 shares issued; 13,652 and 13,628 shares outstanding	18	18
Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding	0	0
Treasury stock 4,199 and 4,223 shares, at cost	(166,371)	(167,339)
Paid-in capital	207,344	205,995
Accumulated other comprehensive loss, net of tax	(3,899)	(5,379)
Retained earnings	355,241	341,016
Total stockholders’ equity	392,333	374,311
Total liabilities and stockholders’ equity	$ 907,869	$ 839,979

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Apr. 17, 2016	Dec. 27, 2015
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	45,000,000	45,000,000
Common stock, shares issued	17,851,000	17,851,000
Common stock, shares outstanding	13,652,000	13,628,000
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury stock, shares	4,199,000	4,223,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands	4 Months Ended
	Apr. 17, 2016	Apr. 19, 2015
Revenues:
Restaurant revenue	$ 396,770,000	$ 388,509,000
Franchise royalties, fees, and other revenues	5,356,000	6,392,000
Total revenues	402,126,000	394,901,000
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Cost of sales	92,325,000	97,950,000
Labor	132,984,000	124,356,000
Other operating	49,708,000	46,584,000
Occupancy	32,498,000	30,147,000
Depreciation and amortization	23,951,000	23,003,000
Selling, general, and administrative expenses	47,288,000	48,061,000
Pre-opening and acquisition costs	2,372,000	955,000
Asset impairment	825,000	0
Total costs and expenses	381,951,000	371,056,000
Income from operations	20,175,000	23,845,000
Other expense:
Interest expense, net and other	1,638,000	1,060,000
Income before income taxes	18,537,000	22,785,000
Provision for income taxes	4,312,000	6,220,000
Net income	$ 14,225,000	$ 16,565,000
Earnings per share:
Basic (in dollars per share)	$ 1.04	$ 1.18
Diluted (in dollars per share)	$ 1.03	$ 1.16
Weighted average shares outstanding:
Basic (in shares)	13,635	14,077
Diluted (in shares)	13,783	14,275

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	4 Months Ended
	Apr. 17, 2016	Apr. 19, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 14,225	$ 16,565
Changes in derivative instrument:
Net change in fair value of interest rate swap	0	(3)
Net loss reclassified into interest expense	0	23
Tax expense	0	(8)
Net change in derivative instrument	0	12
Foreign currency translation adjustment	1,480	(1,117)
Other comprehensive income (loss), net of tax	1,480	(1,105)
Total comprehensive income	$ 15,705	$ 15,460

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	4 Months Ended
	Apr. 17, 2016	Apr. 19, 2015
Cash flows from operating activities:
Net income	$ 14,225,000	$ 16,565,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	23,951,000	23,003,000
Asset impairment	825,000	0
Stock-based compensation expense	2,090,000	1,446,000
Other, net	(1,201,000)	(2,238,000)
Changes in operating assets and liabilities, net of business acquisition:
Accounts receivable and other current assets	14,286,000	11,522,000
Trade accounts payable and accrued liabilities	174,000	(9,045,000)
Unearned revenue	(12,702,000)	(10,211,000)
Other operating assets and liabilities, net	852,000	4,949,000
Net cash provided by operating activities	42,500,000	35,991,000
Cash flows from investing activities:
Purchases of property, equipment, and intangible assets	(52,149,000)	(31,580,000)
Deposit on equipment purchase	0	(5,479,000)
Acquisition of franchise restaurants, net of cash acquired	(39,984,000)	0
Other investing activities	0	(207,000)
Net cash used in investing activities	(92,133,000)	(37,266,000)
Cash flows from financing activities:
Borrowings of long-term debt	137,000,000	95,500,000
Payments of long-term debt and capital leases	(85,671,000)	(99,199,000)
Tax benefit from exercise of stock options	94,000	1,193,000
Proceeds from exercise of stock options and employee stock purchase plan	592,000	2,947,000
Net cash provided by financing activities	52,015,000	441,000
Effect of exchange rate changes on cash	80,000	(127,000)
Net change in cash and cash equivalents	2,462,000	(961,000)
Cash and cash equivalents, beginning of period	22,705,000	22,408,000
Cash and cash equivalents, end of period	25,167,000	21,447,000
Supplemental disclosure of cash flow information
Income taxes paid	1,046,000	1,076,000
Interest paid, net of amounts capitalized	1,484,000	1,486,000
Change in construction related payables	$ 7,768,000	$ 1,162,000

Basis of Presentation and Recen

Basis of Presentation and Recent Accounting Pronouncements	4 Months Ended
	Apr. 17, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Recent Accounting Pronouncements	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 develops, operates, and franchises casual-dining and fast-casual restaurants in North America. As of April 17, 2016 , the Company owned and operated 454 restaurants located in 38 states, the District of Columbia, and two Canadian provinces. The Company also had 86 franchised casual-dining restaurants in 15 states as of April 17, 2016 . 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 and with the instructions to Form 10-Q and Article 10 of Regulation S-X. 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”). 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 27, 2015 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 27, 2015 , filed with the SEC on February 19, 2016. The Company’s quarter that ended April 17, 2016 is referred to as first quarter 2016, or the sixteen weeks ended April 17, 2016 ; the quarter ended April 19, 2015 is referred to as first quarter 2015, or the sixteen weeks ended April 19, 2015 . Recently Issued Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on stock-based compensation, which changes the accounting for, and classification of, excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification, and the classification of those taxes paid on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2016 with early adoption permitted. The guidance will be applied either prospectively, retrospectively, or using a cumulative effect transition method, depending on the area covered in this update. The Company is currently evaluating its expected timing and method of adoption along with the effect this guidance will have on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued new guidance on accounting for leases. This guidance requires the recognition of a liability for lease obligation and a corresponding right-of-use asset on the balance sheet and disclosure of key information about leasing arrangements. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018 using a modified retrospective adoption method. Early adoption is permitted. We are currently evaluating the impact this guidance will have on our consolidated financial statements but expect this adoption will result in a significant increase in the assets and liabilities on our consolidated balance sheet. In May 2014, the FASB issued guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance expands related disclosure requirements. The guidance is effective for reporting periods beginning after December 15, 2017 with early adoption permitted. The new guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. In March 2016, the FASB issued an Accounting Standards Update (“ASU”) that amends the principal versus agent guidance in the new revenue recognition standard. The ASU clarifies that the analysis must focus on whether the entity has control of the good or services before they are transferred to the customer. In addition, in April 2016, the FASB issued an ASU to clarify the guidance on accounting for licenses or intellectual property and identifying performance obligations in the new revenue recognition standard. The ASU clarifies how an entity should evaluate the nature of its promise in grants of a license of intellectual property and when a promised good or service is distinct within the context of a contract. We do not believe the new revenue recognition standard will impact our recognition of food and beverage sales from Company-owned restaurants and our recognition of royalty fees from franchisees. We are continuing to evaluate the impact the adoption of this standard will have on the recognition of other transactions, including the initial franchise fees we recognized when the franchise restaurants opened and franchise contributions to our two national media advertising funds, as well as the expected timing and method of adoption.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	4 Months Ended
	Apr. 17, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	Goodwill and Intangible Assets The following table presents goodwill as of April 17, 2016 and December 27, 2015 (in thousands): Balance, December 27, 2015 $ 81,957 Acquisition 14,285 Translation adjustment $ 1,040 Balance, April 17, 2016 $ 97,282 The Company had no goodwill impairment losses in the period presented in the table above or any prior periods. During the first quarter of 2016, the Company acquired 13 restaurants from a franchisee. Refer to Note 5, Acquisition of Red Robin Franchised Restaurants , for details of the acquisition. The following table presents intangible assets as of April 17, 2016 and December 27, 2015 (in thousands): April 17, 2016 December 27, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 56,521 $ (25,039 ) $ 31,482 $ 50,878 $ (23,904 ) $ 26,974 Favorable leases 13,931 (6,885 ) 7,046 12,991 (6,643 ) 6,348 Liquor licenses 10,193 (9,787 ) 406 10,168 (9,751 ) 417 $ 80,645 $ (41,711 ) $ 38,934 $ 74,037 $ (40,298 ) $ 33,739 Indefinite-lived intangible assets: Liquor licenses and other $ 5,865 $ — $ 5,865 $ 5,834 $ — $ 5,834 Intangible assets, net $ 86,510 $ (41,711 ) $ 44,799 $ 79,871 $ (40,298 ) $ 39,573 There were no impairments to intangible assets during the sixteen weeks ended April 17, 2016 and April 19, 2015 . The aggregate amortization expense related to intangible assets subject to amortization was $1.5 million and $1.3 million for the sixteen weeks ended April 17, 2016 and April 19, 2015 . The estimated aggregate future amortization expense as of April 17, 2016 is as follows, (in thousands): Remainder of 2016 $ 3,276 2017 4,768 2018 4,554 2019 4,473 2020 3,945 Thereafter 17,918 $ 38,934

Stock Incentive Plans

Stock Incentive Plans	4 Months Ended
	Apr. 17, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Incentive Plans	Stock Incentive Plans Under the Company’s Second Amended and Restated 2007 Performance Incentive Plan (the “2007 Stock Plan”), various stock options and stock awards may be granted to employees of the Company and any of the Company’s subsidiaries, directors of the Company, and certain consultants and advisors to the Company or any of its subsidiaries. Stock options are granted with an exercise price equal to the fair market value of shares of the Company’s common stock at the grant date. We account for stock-based compensation in accordance with fair value recognition provisions, calculated using the Black-Scholes option pricing model (the “pricing model”). The weighted-average fair value of non-qualified stock options and the related assumptions used in the pricing model for periods in which options were granted were as follows: Sixteen Weeks Ended April 17, 2016 April 19, 2015 Risk-free interest rate 1.2 % 1.4 % Expected years until exercise 4.7 4.8 Expected stock volatility 39.3 % 40.6 % Dividend yield — % — % Weighted average Black-Scholes fair value per share at date of grant $ 21.93 $ 29.69 The following table presents a summary of the Company’s stock-based compensation activity for the sixteen weeks ended April 17, 2016 (in thousands): Stock Options Restricted Stock Units Outstanding, December 27, 2015 395 75 Granted 125 33 Forfeited/expired (4 ) (1 ) Exercised/vested (7 ) (17 ) Outstanding, April 17, 2016 509 90 We recognized stock-based compensation expense of $2.1 million and $1.4 million for the sixteen weeks ended April 17, 2016 and April 19, 2015 .

Earnings Per Share

Earnings Per Share	4 Months Ended
	Apr. 17, 2016
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share Basic earnings per share amounts are calculated by dividing net income 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 reflect the potential dilution that could occur if holders of options exercised their options into common stock. During the sixteen weeks ended April 17, 2016 and April 19, 2015 , weighted average stock options outstanding of 193 thousand shares and 38 thousand shares were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented. The Company uses the treasury stock method to calculate the effect of outstanding stock options. The computations for basic and diluted earnings per share are as follows (in thousands, except per share data): Sixteen Weeks Ended April 17, 2016 April 19, 2015 Net income $ 14,225 $ 16,565 Basic weighted average shares outstanding 13,635 14,077 Dilutive effect of stock options and awards 148 198 Diluted weighted average shares outstanding 13,783 14,275 Earnings per share: Basic $ 1.04 $ 1.18 Diluted $ 1.03 $ 1.16

Acquisitions of Red Robin Franc

Acquisitions of Red Robin Franchised Restaurants	4 Months Ended
	Apr. 17, 2016
Business Combinations [Abstract]
Acquisitions of Red Robin Franchised Restaurants	Acquisition of Red Robin Franchised Restaurants The Company acquires franchised restaurants from time to time. On March 21, 2016 , the Company acquired 13 restaurants, including real estate at four of the locations, from one of its U.S. franchisees for a purchase price of $40.0 million in cash. The pro forma impact of this acquisition and the operating results of the acquired restaurants are not presented as the impact was not material to reported results. The acquisition was accounted for using the purchase method as defined in ASC 805, Business Combinations . The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the acquired operations with the Company. The goodwill generated by the acquisition is not amortizable for book purposes but is amortizable and deductible for tax purposes. The Company preliminarily allocated the purchase price to the fair value of the assets acquired and liabilities assumed as follows (in thousands): Fair Value at Acquisition Date Property and equipment 18,831 Intangible assets 6,540 Deferred tax assets 2,935 Deferred tax liabilities (2,791 ) Goodwill 14,285 Other assets and liabilities, net 220 Total purchase price 40,020 Of the $18.8 million in property and equipment, $7.5 million is related to land. Of the $6.5 million of intangible assets, $5.6 million is related to reacquired franchise rights, which will be amortized on a straight-line basis over a weighted average of 15.0 years, and $0.9 million is related to acquired favorable leases. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a level 3 fair value measurement. Following this preliminary valuation, the items with the highest likelihood of changing upon finalization of the valuation process include property and equipment, goodwill, and deferred taxes.

Restaurant Impairments and Clos

Restaurant Impairments and Closures	4 Months Ended
	Apr. 17, 2016
Restructuring and Related Activities [Abstract]
Restaurant Impairments and Closures	Restaurant Impairments and Closures During the sixteen weeks ended April 17, 2016 , the Company closed one restaurant and classified the property as held for sale. The Company also relocated one restaurant and recognized $0.8 million asset impairment charge due to the relocation. The Company closed one restaurant at the end of its lease term during the sixteen weeks ended April 19, 2015 . No impairments were recorded during the sixteen weeks ended April 19, 2015 .

Borrowings

Borrowings	4 Months Ended
	Apr. 17, 2016
Debt Disclosure [Abstract]
Borrowings	Borrowings The Company maintains a credit facility (the “Credit Facility”) with a group of lenders which provides for a $325 million revolving line of credit with a sublimit for the issuance of up to $25 million in letters of credit and swingline loans up to $15 million . The Credit Facility also provides a Canadian Dollar borrowing sublimit equivalent to $20 million . On March 11, 2016, the Company entered into an amendment to the Credit Facility to permit sale leaseback transactions under the terms of the Credit Facility up to an aggregate amount of $30 million . The Credit Facility matures on July 2, 2019. As of April 17, 2016 , the Company had outstanding borrowings under the Credit Facility of $253.5 million , in addition to amounts issued under letters of credit of $8.3 million , which reduced the amount available under the credit facility but were not recorded as debt.

Derivative Financial Instrument

Derivative Financial Instruments	4 Months Ended
	Apr. 17, 2016
Derivative and Other Comprehensive Income
Derivative Financial Instruments	Derivative Financial Instruments The Company had no active derivative financial instrument at April 17, 2016 and December 27, 2015 . The Company had one interest rate swap at April 19, 2015 . The loss on the interest rate swap designated as a cash flow hedge recognized in other comprehensive loss and reclassifications from Accumulated other comprehensive loss to earnings for the sixteen weeks ended April 19, 2015 were immaterial.

Fair Value Measurements

Fair Value Measurements	4 Months Ended
	Apr. 17, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	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, and accounts payable approximate fair value due to the short term nature or maturity of the instruments. The following tables present the Company’s assets measured at fair value on a recurring basis as of April 17, 2016 and December 27, 2015 (in thousands): April 17, 2016 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 8,555 $ 8,555 $ — $ — Total assets measured at fair value $ 8,555 $ 8,555 $ — $ — December 27, 2015 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 6,863 $ 6,863 $ — $ — Total assets measured at fair value $ 6,863 $ 6,863 $ — $ — Other than disclosed in Note 5, Acquisition of Red Robin Franchised Restaurants , as of April 17, 2016 and December 27, 2015 , the Company had no financial assets or liabilities that were measured using level 3 inputs. The Company also had no non-financial assets or liabilities that were required to be measured on a recurring basis. Disclosures of Fair Value of Other Assets and Liabilities The Company’s liabilities under its credit facility and capital leases are carried at historical cost in the accompanying condensed consolidated balance sheets. For disclosure purposes, the Company estimated the fair value of the credit facility and capital lease obligations using discounted cash flow analysis based on market rates obtained from independent third parties for similar types of debt. Both the credit facility and the Company’s capital lease obligations are considered to be level 2 instruments. The following table presents the carrying value and estimated fair value of the Company’s credit facility and capital lease obligations as of April 17, 2016 and December 27, 2015 (in thousands): April 17, 2016 December 27, 2015 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Credit facility $ 253,500 $ 253,275 $ 202,000 $ 201,829 Capital lease obligations 7,800 8,865 7,972 9,177 Total $ 261,300 $ 262,140 $ 209,972 $ 211,006

Commitments and Contingencies

Commitments and Contingencies	4 Months Ended
	Apr. 17, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies In the normal course of business, there are various claims in process, matters in litigation, and other contingencies. These include employment-related claims and claims alleging illness, injury, or other food quality, health, or operational issues. Evaluating contingencies related to litigation is a complex process involving subjective judgment on the potential outcome of future events and the ultimate resolution of litigated claims may differ from our current analysis. We review the adequacy of accruals and disclosures pertaining to litigation matters 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 consolidated financial statements. While it is not possible to predict the outcome of these 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. The Company had $4.0 million and $0.1 million of liability recorded for various legal matters as of April 17, 2016 and December 27, 2015. In the first quarter of 2016, the Company recorded $3.9 million of litigation contingencies for employment-related claims.

Basis of Presentation and Rec17

Basis of Presentation and Recent Accounting Pronouncements (Policies)	4 Months Ended
	Apr. 17, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
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 and with the instructions to Form 10-Q and Article 10 of Regulation S-X. 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”). 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 27, 2015 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 27, 2015 , filed with the SEC on February 19, 2016. The Company’s quarter that ended April 17, 2016 is referred to as first quarter 2016, or the sixteen weeks ended April 17, 2016 ; the quarter ended April 19, 2015 is referred to as first quarter 2015, or the sixteen weeks ended April 19, 2015 .
Recently Issued Accounting Standards	Recently Issued Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on stock-based compensation, which changes the accounting for, and classification of, excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification, and the classification of those taxes paid on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2016 with early adoption permitted. The guidance will be applied either prospectively, retrospectively, or using a cumulative effect transition method, depending on the area covered in this update. The Company is currently evaluating its expected timing and method of adoption along with the effect this guidance will have on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued new guidance on accounting for leases. This guidance requires the recognition of a liability for lease obligation and a corresponding right-of-use asset on the balance sheet and disclosure of key information about leasing arrangements. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018 using a modified retrospective adoption method. Early adoption is permitted. We are currently evaluating the impact this guidance will have on our consolidated financial statements but expect this adoption will result in a significant increase in the assets and liabilities on our consolidated balance sheet. In May 2014, the FASB issued guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance expands related disclosure requirements. The guidance is effective for reporting periods beginning after December 15, 2017 with early adoption permitted. The new guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. In March 2016, the FASB issued an Accounting Standards Update (“ASU”) that amends the principal versus agent guidance in the new revenue recognition standard. The ASU clarifies that the analysis must focus on whether the entity has control of the good or services before they are transferred to the customer. In addition, in April 2016, the FASB issued an ASU to clarify the guidance on accounting for licenses or intellectual property and identifying performance obligations in the new revenue recognition standard. The ASU clarifies how an entity should evaluate the nature of its promise in grants of a license of intellectual property and when a promised good or service is distinct within the context of a contract. We do not believe the new revenue recognition standard will impact our recognition of food and beverage sales from Company-owned restaurants and our recognition of royalty fees from franchisees. We are continuing to evaluate the impact the adoption of this standard will have on the recognition of other transactions, including the initial franchise fees we recognized when the franchise restaurants opened and franchise contributions to our two national media advertising funds, as well as the expected timing and method of adoption.

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	4 Months Ended
	Apr. 17, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of goodwill	The following table presents goodwill as of April 17, 2016 and December 27, 2015 (in thousands): Balance, December 27, 2015 $ 81,957 Acquisition 14,285 Translation adjustment $ 1,040 Balance, April 17, 2016 $ 97,282
Schedule of intangible assets subject to amortization	The following table presents intangible assets as of April 17, 2016 and December 27, 2015 (in thousands): April 17, 2016 December 27, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 56,521 $ (25,039 ) $ 31,482 $ 50,878 $ (23,904 ) $ 26,974 Favorable leases 13,931 (6,885 ) 7,046 12,991 (6,643 ) 6,348 Liquor licenses 10,193 (9,787 ) 406 10,168 (9,751 ) 417 $ 80,645 $ (41,711 ) $ 38,934 $ 74,037 $ (40,298 ) $ 33,739 Indefinite-lived intangible assets: Liquor licenses and other $ 5,865 $ — $ 5,865 $ 5,834 $ — $ 5,834 Intangible assets, net $ 86,510 $ (41,711 ) $ 44,799 $ 79,871 $ (40,298 ) $ 39,573
Schedule of intangible assets not subject to amortization	The following table presents intangible assets as of April 17, 2016 and December 27, 2015 (in thousands): April 17, 2016 December 27, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 56,521 $ (25,039 ) $ 31,482 $ 50,878 $ (23,904 ) $ 26,974 Favorable leases 13,931 (6,885 ) 7,046 12,991 (6,643 ) 6,348 Liquor licenses 10,193 (9,787 ) 406 10,168 (9,751 ) 417 $ 80,645 $ (41,711 ) $ 38,934 $ 74,037 $ (40,298 ) $ 33,739 Indefinite-lived intangible assets: Liquor licenses and other $ 5,865 $ — $ 5,865 $ 5,834 $ — $ 5,834 Intangible assets, net $ 86,510 $ (41,711 ) $ 44,799 $ 79,871 $ (40,298 ) $ 39,573
Schedule of estimated aggregate future amortization expense	The estimated aggregate future amortization expense as of April 17, 2016 is as follows, (in thousands): Remainder of 2016 $ 3,276 2017 4,768 2018 4,554 2019 4,473 2020 3,945 Thereafter 17,918 $ 38,934

Stock Incentive Plans (Tables)

Stock Incentive Plans (Tables)	4 Months Ended
	Apr. 17, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of average assumptions used in estimation of fair value of options	The weighted-average fair value of non-qualified stock options and the related assumptions used in the pricing model for periods in which options were granted were as follows: Sixteen Weeks Ended April 17, 2016 April 19, 2015 Risk-free interest rate 1.2 % 1.4 % Expected years until exercise 4.7 4.8 Expected stock volatility 39.3 % 40.6 % Dividend yield — % — % Weighted average Black-Scholes fair value per share at date of grant $ 21.93 $ 29.69
Summary of status of the Company's stock option plans	The following table presents a summary of the Company’s stock-based compensation activity for the sixteen weeks ended April 17, 2016 (in thousands): Stock Options Restricted Stock Units Outstanding, December 27, 2015 395 75 Granted 125 33 Forfeited/expired (4 ) (1 ) Exercised/vested (7 ) (17 ) Outstanding, April 17, 2016 509 90

Earnings Per Share (Tables)

Earnings Per Share (Tables)	4 Months Ended
	Apr. 17, 2016
Earnings Per Share [Abstract]
Schedule of computations for basic and diluted earnings per share	The computations for basic and diluted earnings per share are as follows (in thousands, except per share data): Sixteen Weeks Ended April 17, 2016 April 19, 2015 Net income $ 14,225 $ 16,565 Basic weighted average shares outstanding 13,635 14,077 Dilutive effect of stock options and awards 148 198 Diluted weighted average shares outstanding 13,783 14,275 Earnings per share: Basic $ 1.04 $ 1.18 Diluted $ 1.03 $ 1.16

Acquisition of Red Robin Franch

Acquisition of Red Robin Franchised Restaurants (Tables)	4 Months Ended
	Apr. 17, 2016
Business Combinations [Abstract]
Schedule of Business Acquisitions	The Company preliminarily allocated the purchase price to the fair value of the assets acquired and liabilities assumed as follows (in thousands): Fair Value at Acquisition Date Property and equipment 18,831 Intangible assets 6,540 Deferred tax assets 2,935 Deferred tax liabilities (2,791 ) Goodwill 14,285 Other assets and liabilities, net 220 Total purchase price 40,020

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	4 Months Ended
	Apr. 17, 2016
Fair Value Disclosures [Abstract]
Schedule of fair value assets measured on recurring basis	The following tables present the Company’s assets measured at fair value on a recurring basis as of April 17, 2016 and December 27, 2015 (in thousands): April 17, 2016 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 8,555 $ 8,555 $ — $ — Total assets measured at fair value $ 8,555 $ 8,555 $ — $ — December 27, 2015 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 6,863 $ 6,863 $ — $ — Total assets measured at fair value $ 6,863 $ 6,863 $ — $ —
Schedule of fair value liabilities measured on recurring basis	The following tables present the Company’s assets measured at fair value on a recurring basis as of April 17, 2016 and December 27, 2015 (in thousands): April 17, 2016 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 8,555 $ 8,555 $ — $ — Total assets measured at fair value $ 8,555 $ 8,555 $ — $ — December 27, 2015 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 6,863 $ 6,863 $ — $ — Total assets measured at fair value $ 6,863 $ 6,863 $ — $ —
Summary of fair value of debt	The following table presents the carrying value and estimated fair value of the Company’s credit facility and capital lease obligations as of April 17, 2016 and December 27, 2015 (in thousands): April 17, 2016 December 27, 2015 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Credit facility $ 253,500 $ 253,275 $ 202,000 $ 201,829 Capital lease obligations 7,800 8,865 7,972 9,177 Total $ 261,300 $ 262,140 $ 209,972 $ 211,006

Basis of Presentation and Rec23

Basis of Presentation and Recent Accounting Pronouncements (Details)	4 Months Ended
	Apr. 17, 2016stateprovincerestaurantsegment
Franchisor Disclosure [Line Items]
Number of operating segments | segment	1
Number of reportable segments | segment	1
Company-owned operated restaurants
Franchisor Disclosure [Line Items]
Number of restaurants | restaurant	454
Number of states in which restaurants are located | state	38
Number of Canadian provinces in which restaurants are located | province	2
Franchised restaurants
Franchisor Disclosure [Line Items]
Number of restaurants | restaurant	86
Number of states in which restaurants are located | state	15

Goodwill and Intangible Asset24

Goodwill and Intangible Assets (Details)	4 Months Ended
	Apr. 17, 2016USD ($)	Apr. 19, 2015USD ($)	Mar. 21, 2016restaurant	Dec. 27, 2015USD ($)
Goodwill
Balance, December 27, 2015	$ 81,957,000
Acquisition	14,285,000
Translation adjustment	1,040,000
Balance, April 17, 2016	97,282,000
Impairment to intangible assets	0	$ 0
Intangible Assets
Gross Carrying Amount	80,645,000			$ 74,037,000
Accumulated Amortization	(41,711,000)			(40,298,000)
Net Carrying Amount	38,934,000			33,739,000
Intangible assets, Gross Carrying Amount	86,510,000			79,871,000
Intangible assets, Accumulated Amortization	(41,711,000)			(40,298,000)
Intangible assets, Net Carrying Amount	44,799,000			39,573,000
Aggregate amortization expense	1,500,000	$ 1,300,000
Liquor licenses and other
Intangible Assets
Gross Carrying Amount, Indefinite-lived intangible assets	5,865,000			5,834,000
Accumulated Amortization, Indefinite-lived intangible assets	0			0
Net Carrying Amount, Indefinite-lived intangible assets	5,865,000			5,834,000
Franchise rights
Intangible Assets
Gross Carrying Amount	56,521,000			50,878,000
Accumulated Amortization	(25,039,000)			(23,904,000)
Net Carrying Amount	31,482,000			26,974,000
Favorable leases
Intangible Assets
Gross Carrying Amount	13,931,000			12,991,000
Accumulated Amortization	(6,885,000)			(6,643,000)
Net Carrying Amount	7,046,000			6,348,000
Liquor licenses and other
Intangible Assets
Gross Carrying Amount	10,193,000			10,168,000
Accumulated Amortization	(9,787,000)			(9,751,000)
Net Carrying Amount	$ 406,000			$ 417,000
Acquisition of franchisee restaurants
Goodwill
Number of restaurants acquired from franchisees | restaurant			13

Goodwill and Intangible Asset25

Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands	Apr. 17, 2016	Dec. 27, 2015
Estimated aggregate future amortization expense
Remainder of 2016	$ 3,276
2,017	4,768
2,018	4,554
2,019	4,473
2,020	3,945
Thereafter	17,918
Net Carrying Amount	$ 38,934	$ 33,739

Stock Incentive Plans (Details)

Stock Incentive Plans (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	4 Months Ended
	Apr. 17, 2016	Apr. 19, 2015
Stock-based compensation expense recognized
Stock-based compensation expense	$ 2.1	$ 1.4
Stock Options
Weighted average assumptions used in estimation of fair value of options
Risk-free interest rate (as a percent)	1.20%	1.40%
Expected years until exercise	4 years 8 months 12 days	4 years 9 months 18 days
Expected stock volatility (as a percent)	39.30%	40.60%
Dividend yield (as a percent)	0.00%	0.00%
Weighted average Black-Scholes fair value per share at date of grant (in dollars per share)	$ 21.93	$ 29.69
Stock Options
Outstanding, Beginning of period (in shares)	395
Granted (in shares)	125
Forfeited/expired (in shares)	(4)
Exercised/vested (in shares)	(7)
Outstanding, End of period (in shares)	509
Restricted Stock Units
Restricted Stock Units
Outstanding, Beginning of period (in shares)	75
Granted (in shares)	33
Forfeited/expired (in shares)	(1)
Exercised/vested (in shares)	(17)
Outstanding, End of period (in shares)	90

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	4 Months Ended
	Apr. 17, 2016	Apr. 19, 2015
Earnings Per Share [Abstract]
Weighted average stock options outstanding (in shares)	193	38
Earnings Per Share Reconciliation [Abstract]
Net income	$ 14,225	$ 16,565
Basic weighted average shares outstanding (in shares)	13,635	14,077
Dilutive effect of stock options and awards (in shares)	148	198
Diluted weighted average shares outstanding (in shares)	13,783	14,275
Basic (in dollars per share)	$ 1.04	$ 1.18
Diluted (in dollars per share)	$ 1.03	$ 1.16

Acquisitions of Red Robin Fra28

Acquisitions of Red Robin Franchised Restaurants (Details) $ in Thousands	Mar. 21, 2016USD ($)locationrestaurantfranchisee	Apr. 17, 2016USD ($)	Dec. 27, 2015USD ($)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill		$ 97,282	$ 81,957
Acquisition of franchisee restaurants
Business Acquisition [Line Items]
Number of restaurants acquired from franchisees | restaurant	13
Number of locations real estate was acquired | location	4
Number of franchisees | franchisee	1
Purchase price, cash	$ 40,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Property and equipment	18,831
Intangible assets	6,540
Deferred tax assets	2,935
Deferred tax liabilities	(2,791)
Goodwill	14,285
Other assets and liabilities, net	220
Total purchase price	40,020
Land	7,500
Franchise rights | Acquisition of franchisee restaurants
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Acquired intangible assets	$ 5,600
Acquired intangible assets, useful life	15 years
Favorable lease | Acquisition of franchisee restaurants
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Acquired intangible assets	$ 900

Restaurant Impairments and Cl29

Restaurant Impairments and Closures (Details)	4 Months Ended
	Apr. 17, 2016USD ($)restaurant	Apr. 19, 2015USD ($)restaurant
Restructuring and Related Activities [Abstract]
Number of restaurants closed	1	1
Number of restaurants relocated	1
Asset impairment | $	$ 825,000	$ 0

Borrowings (Details)

Borrowings (Details) - Credit Facility - Line of credit - USD ($)	Apr. 17, 2016	Mar. 11, 2016
Borrowings
Amounts outstanding	$ 253,500,000
Revolving line of credit
Borrowings
Maximum borrowing capacity	325,000,000
Letter of credit
Borrowings
Maximum borrowing capacity	25,000,000
Amounts outstanding	8,300,000
Swingline loans
Borrowings
Maximum borrowing capacity	15,000,000
Canadian dollar borrowing equivalent
Borrowings
Maximum borrowing capacity	$ 20,000,000
Sale leaseback
Borrowings
Maximum borrowing capacity		$ 30,000,000

Derivative Financial Instrume31

Derivative Financial Instruments (Details)	Apr. 19, 2015interest_rate_swap
Derivative and Other Comprehensive Income
Number of derivative instruments held	1

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands	Apr. 17, 2016	Dec. 27, 2015
Assets:
Investments in rabbi trust	$ 8,555	$ 6,863
Total assets measured at fair value	8,555	6,863
Level 1
Assets:
Investments in rabbi trust	8,555	6,863
Total assets measured at fair value	8,555	6,863
Level 2
Assets:
Investments in rabbi trust	0	0
Total assets measured at fair value	0	0
Level 3
Assets:
Investments in rabbi trust	0	0
Total assets measured at fair value	$ 0	$ 0

Fair Value Measurements (Deta33

Fair Value Measurements (Details 1) - USD ($) $ in Thousands	Apr. 17, 2016	Dec. 27, 2015
Carrying value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit facility	$ 253,500	$ 202,000
Capital lease obligations	7,800	7,972
Total	261,300	209,972
Estimated Fair Value | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit facility	253,275	201,829
Capital lease obligations	8,865	9,177
Total	$ 262,140	$ 211,006

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Millions	4 Months Ended
	Apr. 17, 2016	Dec. 27, 2015
Commitments and Contingencies Disclosure [Abstract]
Liability for various legal matters	$ 4	$ 0.1
Compensation-related Claims
Loss Contingencies [Line Items]
Loss contingencies recorded during period	$ 3.9