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8-K - 8-K - Texas Roadhouse, Inc.a12-17295_18k.htm

Exhibit 99.1

 

Texas Roadhouse, Inc. Announces Second Quarter 2012 Results

 

LOUISVILLE, KY. (July 30, 2012) — Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 26, 2012.

 

 

 

Second Quarter

 

Year to Date

 

($000’s)

 

2012

 

2011

 

% Change

 

2012

 

2011

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

320,275

 

279,572

 

15

 

645,114

 

563,357

 

15

 

Income from operations (1)

 

31,247

 

23,748

 

32

 

60,649

 

53,957

 

12

 

Net income (1)

 

20,310

 

16,076

 

26

 

39,179

 

35,869

 

9

 

Diluted EPS (1)

 

$

0.28

 

$

0.22

 

28

 

$

0.55

 

$

0.49

 

12

 

 


(1) 2012 YTD includes a charge related to a legal settlement discussed below.

 

Results for the second quarter included:

 

·                  Comparable restaurant sales increased 4.5% at company restaurants and 4.8% at franchise restaurants;

·                  7 company restaurants were opened;

·                  Restaurant margins, as a percentage of restaurant sales, increased 91 basis points to 19.1%;

·                  Diluted earnings per share increased 28% to $0.28 from $0.22 in the prior year.

 

Results year-to-date included:

 

·                  Comparable restaurant sales increased 5.3% at company restaurants and 5.9% at franchise restaurants;

·                  15 company restaurants were opened;

·                  Restaurant margins, as a percentage of restaurant sales, increased 39 basis points to 19.1%;

·                  As previously disclosed, the Company recorded a one-time, pre-tax charge of $5.0 million ($3.1 million after-tax) in the first quarter of 2012 for a legal settlement, which had a $0.04 impact on diluted earnings per share;

·                  Before the previously disclosed first quarter charge, diluted earnings per share increased 20% to $0.59 from $0.49 in the prior year.

 

Kent Taylor, Chief Executive Officer of Texas Roadhouse, commented, “Our results remained strong in the second quarter highlighted by 15 percent revenue growth and a 28 percent increase in diluted earnings per share.  We are encouraged by the impressive sales volumes currently being generated by our 2012 restaurant class.  Our solid real estate pipeline will enable us to grow at least 25 restaurants in 2013.   Finally, our balance sheet and cash flow remain healthy as we continue to internally fund our growth while returning excess capital to our shareholders through dividends.”

 

2012 Outlook

 

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its third quarter of fiscal 2012 increased approximately 5.5% compared to the prior year period which includes a benefit from the timing of the fourth of July holiday.

 



 

The Company currently anticipates that GAAP diluted earnings per share for 2012, which includes the legal settlement charge discussed below, will be $0.94 to $0.96.  This compares to diluted earnings per share of $0.88 in 2011.  The updated guidance is based, in part, on the following assumptions and other information:

 

·                  Comparable restaurant sales growth of 4.0% to 4.5%, the low end of our previously expected range;

·                  Approximately 25 company restaurant openings;

·                  Food cost inflation of approximately 7.0%, the low end of our previously expected range;

·                  A pre-tax charge of $5.0 million ($3.1 million after-tax) relating to a legal settlement.  This charge was recorded in the first quarter of 2012 and is expected to negatively impact full year 2012 diluted earnings per share by approximately $0.04;

·                  An income tax rate of 32.5% to 33.0%, which is higher than the prior year rate of 29.5% as a result of the expiration of certain federal tax credits at the end of 2011.  The increased tax rate is expected to negatively impact full year 2012 diluted earnings per share by approximately $0.04; and

·                  Total capital expenditures of approximately $90.0 million, higher than our previous range of $80.0 to $85.0 million.

 

Conference Call

 

The Company is hosting a conference call today, July 30, 2012, at 5:00 p.m. Eastern Time to discuss these results.  The dial-in number is (888) 204-4426 or (913) 312-1301 for international calls. A replay of the call will be available for one week following the conference call.  To access the replay, please dial (877) 870-5176 or (858) 384-5517 for international calls, and use 6138467 as the pass code.  There will be a simultaneous Web cast conducted at www.texasroadhouse.com.

 

About the Company

 

Texas Roadhouse is a casual dining concept that first opened in 1993 and today operates over 380 restaurants system-wide in 47 states and one foreign country.  For more information, please visit the Company’s Web site at www.texasroadhouse.com.

 

Forward-looking Statements

 

Certain statements in this release that are not historical facts, including, without limitation, those relating to our anticipated financial performance, are forward-looking statements that involve risks and uncertainties.  Such statements are based upon the current beliefs and expectations of the management of the Company.  Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the actual number of restaurants opening, the sales at these and our other company and franchise restaurants, changes in restaurant development or operating costs, such as food and labor, our ability to acquire franchise restaurants, our ability to integrate the franchise restaurants we acquire or other concepts we develop, strength of consumer spending, pending or future legal claims, conditions beyond the Company’s control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting the Company’s customers or food supplies, acts of war or terrorism and other factors disclosed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission.  Investors should take such risks into account when making investment decisions.  Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.  The Company undertakes no obligation to update any forward-looking statements.

 

# # #

 



 

Contacts:

 

Investor Relations

Tonya Robinson

502-515-7300

 

Media

Travis Doster

502-638-5457

 



 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)

 

 

 

13 Weeks Ended

 

26 Weeks Ended

 

 

 

June 26, 2012

 

June 28, 2011

 

June 26, 2012

 

June 28, 2011

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

317,546

 

$

277,089

 

$

639,558

 

$

558,409

 

Franchise royalties and fees

 

2,729

 

2,483

 

5,586

 

4,948

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

320,275

 

279,572

 

645,144

 

563,357

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Restaurant operating costs:

 

 

 

 

 

 

 

 

 

Cost of sales

 

106,860

 

92,266

 

216,515

 

185,807

 

Labor

 

93,235

 

82,912

 

186,582

 

165,632

 

Rent

 

6,379

 

5,700

 

12,631

 

11,357

 

Other operating

 

50,555

 

45,938

 

101,784

 

91,219

 

Pre-opening

 

2,780

 

2,196

 

6,365

 

4,086

 

Depreciation and amortization

 

11,546

 

10,553

 

22,893

 

21,153

 

Impairment and closure

 

20

 

20

 

39

 

46

 

General and administrative

 

17,653

 

16,239

 

37,686

 

30,100

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

289,028

 

255,824

 

584,495

 

509,400

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

31,247

 

23,748

 

60,649

 

53,957

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

568

 

542

 

1,173

 

1,107

 

Equity income from investments in unconsolidated affiliates

 

121

 

97

 

162

 

200

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

30,800

 

23,303

 

59,638

 

53,050

 

Provision for income taxes

 

9,952

 

6,604

 

19,037

 

15,876

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests (1)

 

$

20,848

 

$

16,699

 

$

40,601

 

$

37,174

 

Less: Net income attributable to noncontrolling interests

 

538

 

623

 

1,422

 

1,305

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

$

20,310

 

$

16,076

 

$

39,179

 

$

35,869

 

 

 

 

 

 

 

 

 

 

 

Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.29

 

$

0.23

 

$

0.56

 

$

0.50

 

Diluted

 

$

0.28

 

$

0.22

 

$

0.55

 

$

0.49

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

70,129

 

71,261

 

69,763

 

71,654

 

Diluted

 

71,587

 

72,791

 

71,247

 

73,256

 

 


(1) Results for the 26 weeks ended June 26, 2012 include a $5.0 milllion charge ($3.1 million, net of tax), before the statutory income tax rate, relating to the settlement of a legal matter.  The settlement is included in general and administrative costs.

 



 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

(unaudited)

 

 

 

 

 

June 26, 2012

 

December 27, 2011

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

77,225

 

$

73,731

 

Other current assets

 

34,469

 

38,243

 

Property and equipment, net

 

515,620

 

497,217

 

Goodwill

 

110,946

 

110,946

 

Intangible assets, net

 

8,504

 

9,042

 

Other assets

 

12,612

 

11,491

 

 

 

 

 

 

 

Total assets

 

$

759,376

 

$

740,670

 

 

 

 

 

 

 

Current maturities of long-term debt and obligations under capital leases

 

321

 

304

 

Other current liabilities

 

122,771

 

136,068

 

Long-term debt and obligations under capital leases, excluding current maturities

 

51,437

 

61,601

 

Other liabilities

 

46,979

 

46,875

 

Texas Roadhouse, Inc. and subsidiaries stockholders’ equity

 

533,007

 

491,904

 

Noncontrolling interests

 

4,861

 

3,918

 

 

 

 

 

 

 

Total liabilities and equity

 

$

759,376

 

$

740,670

 

 



 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

26 Weeks Ended

 

 

 

June 26, 2012

 

June 28, 2011

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net income including noncontrolling interests

 

$

40,601

 

$

37,174

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

 

 

Depreciation and amortization

 

22,893

 

21,153

 

Share-based compensation expense

 

6,324

 

5,733

 

Other noncash adjustments

 

(2,991

)

2,075

 

Change in working capital

 

(6,576

)

(9,784

)

Net cash provided by operating activities

 

60,251

 

56,351

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Capital expenditures - property and equipment

 

(42,547

)

(29,093

)

Proceeds from sale of property and equipment, including insurance proceeds

 

106

 

75

 

Net cash used in investing activities

 

(42,441

)

(29,018

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

(Repayments) of revolving credit facility, net

 

(10,000

)

 

Repurchase shares of common stock

 

 

(25,269

)

Dividends paid

 

(11,806

)

(5,692

)

Other financing activities

 

7,490

 

789

 

Net cash used in financing activities

 

(14,316

)

(30,172

)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

3,494

 

(2,839

)

Cash and cash equivalents - beginning of year

 

73,731

 

82,215

 

Cash and cash equivalents - end of year

 

$

77,225

 

$

79,376

 

 



 

Texas Roadhouse, Inc. and Subsidiaries

Supplemental Financial and Operating Information

($ amounts in thousands, except weekly sales by group)

(unaudited)

 

 

 

Second Quarter

 

Change

 

Year to Date

 

Change

 

 

 

2012

 

2011

 

vs LY

 

2012

 

2011

 

vs LY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant openings

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

7

 

3

 

4

 

15

 

5

 

10

 

Company - Aspen Creek

 

0

 

0

 

0

 

0

 

0

 

0

 

Franchise - Texas Roadhouse

 

0

 

0

 

0

 

0

 

0

 

0

 

Total

 

7

 

3

 

4

 

15

 

5

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurants open at the end of the quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

306

 

276

 

30

 

 

 

 

 

 

 

Company - Aspen Creek

 

3

 

3

 

0

 

 

 

 

 

 

 

Franchise - Texas Roadhouse

 

72

 

71

 

1

 

 

 

 

 

 

 

Total

 

381

 

350

 

31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

317,546

 

$

277,089

 

14.6

%

$

639,558

 

$

558,409

 

14.5

%

Store weeks

 

3,962

 

3,607

 

9.8

%

7,813

 

7,175

 

8.9

%

Comparable restaurant sales growth (1)

 

4.5

%

4.4

%

 

 

5.3

%

4.5

%

 

 

Texas Roadhouse restaurants only:

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurant sales growth (1)

 

4.5

%

4.4

%

 

 

5.3

%

4.6

%

 

 

Average unit volume (2)

 

$

1,038

 

$

997

 

4.1

%

$

2,118

 

$

2,019

 

4.9

%

Weekly sales by group:

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurants (265 units)

 

$

80,141

 

 

 

 

 

 

 

 

 

 

 

Average unit volume restaurants (16 units)

 

$

74,531

 

 

 

 

 

 

 

 

 

 

 

Restaurants less than 6 months old (25 units)

 

$

87,954

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant operating costs (as a % of restaurant sales)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

33.7

%

33.3

%

35

bps

33.9

%

33.3

%

58

bps

Labor

 

29.4

%

29.9

%

(56

)bps

29.2

%

29.7

%

(49

)bps

Rent

 

2.0

%

2.1

%

(5

)bps

2.0

%

2.0

%

(6

)bps

Other operating

 

15.9

%

16.6

%

(66

)bps

15.9

%

16.3

%

(42

)bps

Total

 

80.9

%

81.9

%

(91

)bps

80.9

%

81.3

%

(39

)bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant margins (3)

 

19.1

%

18.1

%

91

bps

19.1

%

18.7

%

39

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise royalties and fees

 

$

2,729

 

$

2,483

 

9.9

%

$

5,586

 

$

4,948

 

12.9

%

Store weeks

 

936

 

923

 

1.4

%

1,872

 

1,846

 

1.4

%

Comparable restaurant sales growth (1)

 

4.8

%

3.6

%

 

 

5.9

%

3.8

%

 

 

Average unit volume (2)

 

$

1,030

 

$

983

 

4.8

%

$

2,091

 

$

1,972

 

6.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-opening expense

 

$

2,780

 

$

2,196

 

26.6

%

$

6,365

 

$

4,086

 

55.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

11,546

 

$

10,553

 

9.4

%

$

22,893

 

$

21,153

 

8.2

%

As a % of revenue

 

3.6

%

3.8

%

(17

)bps

3.5

%

3.8

%

(21

)bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses (4)

 

$

17,653

 

$

16,239

 

8.7

%

$

37,686

 

$

30,100

 

25.2

%

As a % of revenue

 

5.5

%

5.8

%

(30

)bps

5.8

%

5.3

%

50

bps

 


(1)  Comparable restaurant sales growth includes sales from domestic restaurants open 18 months as of the beginning of the measurement period, excluding sales from restaurants closed during the period.

(2)  Average unit volume includes sales from domestic Texas Roadhouse restaurants open six months as of the beginning of the measurement period, excluding sales from restaurants closed during the period.

(3)  Restaurant margins represent restaurant sales less restaurant operating costs (as a percentage of restaurant sales).

(4) Results for the 26 weeks ended June 26, 2012 include a $5.0 million pre-tax charge for the settlement of a legal matter.

 

Amounts may not foot due to rounding.

 



 

Texas Roadhouse, Inc. and Subsidiaries

Reconciliation of GAAP and Non-GAAP Information

(in thousands, except per share data)

(unaudited)

 

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) throughout this document, the Company has provided non-GAAP measurements which present operating results on a basis before the impact of a settlement of a legal matter.  This item is described in detail throughout this document.

 

The Company used earnings before the impact of the legal settlement as a key performance measure of results of operations for purposes of evaluating performance internally.  This non-GAAP measurement is not intended to replace the presentation of our financial results in accordance with GAAP.  Rather, the Company believes that the presentation of results before the legal settlement provides additional information to facilitate the comparison of past and present operations, excluding items that the Company does not believe are indicative of our ongoing operations in the 26 weeks ended June 26, 2012.

 

 

 

For the 26 weeks Ended

 

 

 

June 26, 2012

 

June 28, 2011

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries, excluding settlement charge

 

$

42,240

 

$

35,869

 

 

 

 

 

 

 

Amount reserved for settlement of a legal matter, net of tax (1)

 

$

(3,062

)

$

 

 

 

 

 

 

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

$

39,179

 

$

35,869

 

 

 

 

 

 

 

Weighted average diluted shares outstanding

 

71,247

 

73,256

 

 

 

 

 

 

 

Diluted earnings per share, excluding settlement charge

 

$

0.59

 

$

0.49

 

Impact of settlement charge on diluted earnings per share

 

$

(0.04

)

$

 

Diluted earnings per share

 

$

0.55

 

$

0.49

 

 


(1)  Amount reserved in the first quarter of fiscal 2012 for the settlement of a legal matter was $5.0 million before the statutory income tax rate.  The settlement amount was included in general and administrative costs on the Company’s Condensed Consolidated Statements of Income and Comprehensive Income.