Red Robin Gourmet Burgers, Inc. Provides Business Update

Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) ("Red Robin" or the "Company"), a full-service restaurant chain serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphere, today provided a business update, including preliminary, unaudited comparable restaurant revenue results for the fourth quarter ended December 27, 2020.

Paul J.B. Murphy III, Red Robin's President and Chief Executive Officer, said, "During an unprecedented year due to the pandemic, we achieved a great deal, strengthening Red Robin's operational execution, business model and liquidity. Our accomplishments are now enabling us to focus on creating long-term value for all shareholders as we enter 2021."

Murphy concluded, "We began the fourth quarter with sequential improvement in comparable restaurant revenue compared to the third quarter, however, momentum stalled due to heightened dine-in and other restrictions in 43% of Company-owned restaurants including restaurants in our key states of California, Colorado, Oregon, and Washington. While the near-term is likely to remain volatile because of COVID-19, we are encouraged by recent state re-openings, and we expect indoor dining to be re-opened at 39 restaurants as of January 11^th. We firmly believe Red Robin is well-positioned from both a sales and profitability standpoint when conditions normalize."

Fiscal Year 2020 Accomplishments

Despite the COVID-19 pandemic, we made significant progress on our strategic plan during fiscal year 2020 to solidify our financial longevity and develop a more robust business model. Our accomplishments this past year include the following:

• Significantly grew off-premise sales, which more than doubled over the prior year;
• Continued Donatos roll-out, now in 79 restaurants, a proven growth catalyst driving approximately $45 thousand per restaurant in incremental gross margin by the second year;
• Structurally improved restaurant and enterprise level margin for the long-term compared to 2019;
  • Reduced our menu by over 1/3, improving operational execution and resulting in over $2 million in annual savings;
  • Implementing new management labor structure, including approximately $14 million in annual savings⁽¹⁾;
  • Optimizing our portfolio by completing lease negotiations for more than 75% of Company-owned restaurants resulting in 3% to 4% in occupancy expense savings over remaining lease terms, as well as permanently closing select restaurants; and
  • Reduced general and administrative expenses by more than 10%, or approximately $10 million.
• Reduced costs are expected to result in enterprise margin improvement of over 100 basis points during 2022, as revenues approach pre-pandemic levels, while 2021 is expected to be lower primarily due to sales deleverage related to the pandemic and other inflationary costs;
• Implemented our Total Guest Experience ("TGX") hospitality model, resulting in highest ever Guest Satisfaction Scores; and
• Increased website traffic by approximately 20%, and achieved best ever loyalty email engagement through enhanced segmentation and targeting.

Preliminary Fourth Quarter 2020 Net Comparable Restaurant Revenue Summary Compared to Fourth Quarter 2019