Dennis Mullen, chairman and chief executive officer of the restaurant group said the acquisition comes as Red Robin heads for a major expansion with the planned opening of 32 restaurants this year. Seventeen of those restaurants have already been opened and 15 more are being built, Mullen said.
The Greenwood Village, CO-based firm's latest acquisitions are expected to add 4 cents to 5 cents per share to earnings this year, excluding acquisition-related charges. The company said it expects a non-cash charge of about 7 cents to 9 cents a share related to the termination of franchise agreements for some of the new restaurants that operate at royalty rates lower than current market rates. The two remaining restaurants are expected to close pending the finalization of lease agreements with landlords, Mullen said.
All 13 franchised restaurants, which generated a total of $55.9 million in revenue last year, were owned by various partnerships affiliated with Great Western Dining, of Tipton, MO.Red Robin, which operates 320 stores in the US and Canada, has been a solid contender in the casual dining field since opening its doors in Seattle in 1969.
Chief Financial Officer Katie Scherping told conference attendees that the chain has shown positive comps in the last eight quarters with 61% of all restaurants bringing in between $2.5 million to 4 million annually and another 19% doing more than $4 million in business."Total revenues have grown consistently year-over-year 20% plus," she said.
Scherping says the company expects solid revenue growth in the future as the firm moves forward with its growth strategy of penetrating new markets and gaining market share in its existing locations.
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