Red Robin Gourmet Burgers, Inc. (RRGB) Cash Flow Statement

The conversion ratio is erratic, with OCF/NI swinging between negative and positive values that reflect the sign mismatch rather than true earnings quality. When net income is negative and operating cash flow is positive, the difference likely reflects large D&A of $12M to $18M per quarter and other non-cash charges. Investors should monitor whether this add-back pattern persists, since it cannot continue indefinitely without a return to sustained profitability.

Free cash flow has been positive in only about half of the observed quarters, and the magnitude of positive results is small relative to revenue. The 2025Q1 peak of 1.9% margin and the 2026Q2 result of 1.0% suggest modest cash generation at best. The trajectory does not yet show a clear upward trend that would support valuation on cash generation.

CapEx at these levels appears largely maintenance in nature, given that D&A of $9.7M to $18.2M per quarter substantially exceeds capital spending. Spending below depreciation may indicate an aging asset base, which could pressure guest experience and future traffic. The constraint on spending likely reflects the cash position, though whether this is sustainable warrants further investigation.

The absence of dividends is consistent with a company whose free cash flow has not reliably covered its obligations. An acquisition-related outflow of $23.4M appears in 2024Q1, though its purpose cannot be confirmed from the data provided. Capital deployment appears defensive, prioritizing liquidity over return of capital.

Large working capital movements relative to a small FCF base mean timing effects dominate the reported cash picture. Several outflows coincide with negative operating cash flow quarters, which may suggest cash absorption from payables or accrued liability timing rather than structural deterioration. Investors should monitor whether working capital reversals continue to flatter or depress reported quarters.