Company: RRGB
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001171759-25-000012
Chunk: 22

Company: RED ROBIN GOURMET BURGERS INC
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1A
Chunk 22
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 expense, and capital deployment strategies.

Our ability to fund our operating plans and to implement our capital deployment strategies depends on sufficient cash flow from operations or other financing, including using funding under our revolving credit facility and from potential real property sales. We may also seek access to the debt or equity capital markets. Any additional capital raised through the sale of equity may dilute our shareholders ownership percentages and could also result in a decrease in the market value of our securities.

Our capital deployment strategies include but are not limited to, maintaining existing restaurants and infrastructure, paying down debt, executing on our long-term transformation strategy, and improving existing restaurants. If we experience decreased cash flow from operations, or an inability to access new capital on acceptable terms with acceptable interest rates if needed, our ability to fund our operations and planned initiatives, and to take advantage of growth opportunities, may be delayed or negatively affected. In addition, these disruptions and any resulting negative effect on our net income, cash flows, or other relevant financial performance metrics under our revolving credit facility could affect our ability to borrow or comply with our covenants under that facility.

If we are unable to service our debt or comply with the financial and other covenants in our credit facility, our financial condition could be negatively affected.  

As of December 29, 2024, the total principal amount of our debt was $189.5 million. A substantial portion of our cash flows are dedicated to debt service payments. Our business may not continue to generate cash flow from operations in the future sufficient to meet our debt service, working capital and capital expenditure needs. Additionally, our credit facility contains financial and other restrictive covenants, including among others, a total net leverage ratio covenant. A breach of these covenants could result in default, and if such default is not cured or waived, our lenders could accelerate our debt and declare it immediately due and payable. If this occurs, we may not be able to repay or borrow sufficient funds to refinance the debt. Even if financing is available, it may not be on acceptable terms. A default under our credit facility could cause a material adverse effect on our financial condition, including our liquidity and cash flows.

A privacy or security breach involving our information technology systems, or the failure of our data security measures could interrupt our business, damage our reputation, and negatively affect our operations and financial condition.

Protecting Guest, Team Member, and Company data is critical. We are subject to numerous privacy and data protection laws and regulations and the regulatory environment surrounding information security and privacy is