Business Context and Reporting Period
Company: Red Robin Gourmet Burgers, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: January 10, 2020
Event: Entry into a new material definitive agreement (Credit Agreement) and termination of the prior credit agreement.
Key Financial Metrics and Debt Structure
This filing details a refinancing transaction rather than operational financial results. Key debt metrics include:
- Total Facility Size: $300 million.
- Revolving Line of Credit: $161.5 million (no required amortization).
- Term Loan: $138.5 million (requires quarterly principal payments at 7.0% of the original principal balance).
- Maturity Date: January 10, 2025.
- Expansion Option: Borrower may increase the facility by up to an additional $100 million subject to lender participation.
- Collateral: Secured by substantially all assets of the borrower and guarantors.
Note: The filing text does not provide specific values for revenue, profit, cash flow, margins, or current liquidity ratios.
Material Changes Versus Prior Period
- Termination of Prior Agreement: The existing credit agreement dated June 30, 2016, was terminated effective January 10, 2020.
- Refinancing: All outstanding borrowings, accrued interest, and fees under the prior agreement were paid off using proceeds from the new Credit Agreement.
- Security Agreement: A new Amended and Restated Security Agreement was executed, replacing the 2016 agreement and granting a first priority security interest in substantially all assets.
Guidance, Outlook, and Management Commentary
Permitted Uses of Proceeds: The new credit facility is available to refinance existing indebtedness, finance restaurant construction costs, pay associated fees, and provide working capital and general corporate requirements, including permitted acquisitions and redemption of capital stock.
Risks and Contingencies: The filing notes that the summary descriptions are qualified by the full text of the Credit Agreement and Security Agreement. Borrowings are secured by substantially all assets, creating a lien on the company's balance sheet.
Important Facts for Investor Verification
- Verify the specific interest rate margins and fees associated with the new Credit Agreement, as only the principal amortization rate (7.0% of original balance) is explicitly stated in the summary.
- Confirm the total amount of debt outstanding immediately following the refinancing to assess leverage ratios.
- Review the full text of the Credit Agreement (Exhibit 10.1) for financial covenants and restrictions on future capital expenditures or dividends.
- Monitor the utilization of the $161.5 million revolving line of credit for liquidity management.