Attached files

file filename
8-K - 8-K - Texas Roadhouse, Inc.a16-15959_18k.htm

Exhibit 99.1

 

Texas Roadhouse, Inc. Announces Second Quarter 2016 Results

 

LOUISVILLE, KY. (August 1, 2016) — Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 28, 2016.

 

 

 

Second Quarter

 

Year to Date

 

($000’s)

 

2016

 

2015

 

% Change

 

2016

 

2015

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

508,808

 

$

454,698

 

12

%

$

1,024,367

 

$

914,928

 

12

%

Income from operations

 

49,782

 

31,696

 

57

%

102,593

 

80,296

 

28

%

Net income

 

33,605

 

21,138

 

59

%

69,198

 

53,430

 

30

%

Diluted EPS

 

$

0.47

 

$

0.30

 

58

%

$

0.98

 

$

0.76

 

29

%

 

Results for the second quarter included the following highlights:

 

·                  Comparable restaurant sales growth of 4.5% at company restaurants and 2.6% at franchise restaurants;

·                  Restaurant margin, as a percentage of restaurant sales, increased 302 basis points to 19.2%, primarily driven by lower food costs;

·                  Diluted earnings per share increased 58.5% to $0.47 from $0.30 in the prior year; and,

·                  Seven company-owned restaurants were opened, including one Bubba’s 33 restaurant.

 

Results for year-to-date included the following highlights:

 

·                  Comparable restaurant sales increased 4.5% at company restaurants and 2.8% at franchise restaurants;

·                  Restaurant margin, as a percentage of restaurant sales, increased 208 basis points to 19.7% primarily driven by lower food costs;

·                  Diluted earnings per share increased 29.1% to $0.98 from $0.76 in the prior year;

·                  The Company recorded a pre-tax charge of $5.5 million ($3.4 million after-tax) related to a legal settlement which had a $0.05 impact on diluted earnings per share and a 6.3% impact on diluted earnings per share growth;

·                  14 company-owned restaurants were opened, including three Bubba’s 33 restaurants; and,

·                  The Company repurchased 114,700 shares of its common stock for $4.1 million.

 

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “Our operators continued to deliver strong operational and financial results with solid comparable restaurant sales growth and an increase in restaurant margin.  Positive guest counts primarily drove the increase in comparable restaurant sales, marking our 26th consecutive quarter of growth, while lower commodity costs continued to pave the way for margin expansion.  On the development front, we are on track to open approximately 30 company restaurants this year and we continue to fill our new restaurant pipeline for next year and beyond.”

 

2016 Outlook

 

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its third quarter of fiscal 2016 increased approximately 3.7% compared to the prior year period.

 

Management updated the following expectation for 2016:

 

·                  2.5% to 3.0% food cost deflation compared to previous guidance of 1.0% to 2.0% food cost deflation.

 

Management reiterated the following expectations for 2016:

 

·                  Positive comparable restaurant sales growth;

 



 

·                  Approximately 30 company restaurant openings, including approximately seven Bubba’s 33 restaurants;

·                  An income tax rate of approximately 30.0%; and,

·                  Total capital expenditures of $165.0 million to $175.0 million.

 

Conference Call

 

The Company is hosting a conference call today, August 1, 2016 at 5:00 p.m. Eastern Time to discuss these results.  The dial-in number is (888) 334-3004 or (719) 325-2410 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 8691041 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 500 restaurants system-wide in 49 states and five foreign countries.  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; our ability to continue to generate the necessary cash flows to fund our new restaurant growth, continue our share repurchase program and pay a quarterly cash dividend; strength of consumer spending; pending or future legal claims; breaches of security; conditions beyond our control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customers or food supplies; food safety and food-borne illness concerns; acts of war or terrorism and other factors disclosed from time to time in our filings with the U.S. Securities and Exchange Commission.  Investors should take such risks into account when making investment decisions.  Shareholders 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.  We undertake no obligation to update any forward-looking statements.

 

# # #

 

Contacts:

Investor Relations

Tonya Robinson

(502) 515-7269

 

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 28, 2016

 

June 30, 2015

 

June 28, 2016

 

June 30, 2015

 

Revenue:

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

504,630

 

$

450,692

 

$

1,015,914

 

$

906,985

 

Franchise royalties and fees

 

4,178

 

4,006

 

8,453

 

7,943

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

508,808

 

454,698

 

1,024,367

 

914,928

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Restaurant operating costs (excluding depreciation and amortization shown separately below):

 

 

 

 

 

 

 

 

 

Cost of sales

 

171,551

 

168,077

 

344,679

 

328,057

 

Labor

 

150,014

 

132,084

 

297,560

 

263,488

 

Rent

 

10,184

 

9,138

 

20,211

 

18,117

 

Other operating

 

75,887

 

68,358

 

153,499

 

137,675

 

Pre-opening

 

4,411

 

4,909

 

9,236

 

8,727

 

Depreciation and amortization

 

20,238

 

16,816

 

39,777

 

33,151

 

Impairment and closure

 

30

 

 

41

 

 

General and administrative

 

26,711

 

23,620

 

56,771

 

45,417

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

459,026

 

423,002

 

921,774

 

834,632

 

Income from operations

 

49,782

 

31,696

 

102,593

 

80,296

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

309

 

495

 

614

 

1,010

 

Equity income from investments in unconsolidated affiliates

 

475

 

467

 

827

 

839

 

Income before taxes

 

49,948

 

31,668

 

102,806

 

80,125

 

Provision for income taxes

 

15,087

 

9,402

 

30,944

 

24,278

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

34,861

 

$

22,266

 

$

71,862

 

$

55,847

 

Less: Net income attributable to noncontrolling interests

 

1,256

 

1,128

 

2,664

 

2,417

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

$

33,605

 

$

21,138

 

$

69,198

 

$

53,430

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

$

0.48

 

$

0.30

 

$

0.98

 

$

0.76

 

Diluted

 

$

0.47

 

$

0.30

 

$

0.98

 

$

0.76

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

70,368

 

70,026

 

70,269

 

69,933

 

Diluted

 

70,876

 

70,648

 

70,840

 

70,588

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.19

 

$

0.17

 

$

0.38

 

$

0.34

 

 



 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

June 28, 2016

 

December 29, 2015

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

95,305

 

$

59,334

 

Other current assets

 

50,655

 

74,479

 

Property and equipment, net

 

778,634

 

751,288

 

Goodwill

 

116,571

 

116,571

 

Intangible assets, net

 

4,150

 

4,827

 

Other assets

 

27,886

 

26,207

 

 

 

 

 

 

 

Total assets

 

$

1,073,201

 

$

1,032,706

 

 

 

 

 

 

 

Current maturities of long-term debt

 

151

 

144

 

Other current liabilities

 

218,725

 

256,498

 

Long-term debt, excluding current maturities

 

50,472

 

25,550

 

Other liabilities

 

78,731

 

73,332

 

Texas Roadhouse, Inc. and subsidiaries stockholders’ equity

 

717,425

 

669,662

 

Noncontrolling interests

 

7,697

 

7,520

 

 

 

 

 

 

 

Total liabilities and equity

 

$

1,073,201

 

$

1,032,706

 

 



 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

26 Weeks Ended

 

 

 

June 28, 2016

 

June 30, 2015

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net income including noncontrolling interests

 

$

71,862

 

$

55,847

 

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

 

 

 

 

 

Depreciation and amortization

 

39,777

 

33,151

 

Share-based compensation expense

 

11,703

 

10,215

 

Other noncash adjustments

 

(493

)

(2,992

)

Change in working capital

 

(8,781

)

(1,398

)

Net cash provided by operating activities

 

114,068

 

94,823

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Capital expenditures - property and equipment

 

(69,159

)

(70,933

)

Proceeds from sale of property and equipment, including insurance proceeds

 

 

9

 

Net cash used in investing activities

 

(69,159

)

(70,924

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from revolving credit facility

 

25,000

 

 

Repurchase shares of common stock

 

(4,110

)

(3,138

)

Dividends paid

 

(25,277

)

(34,247

)

Other financing activities

 

(4,551

)

(1,671

)

Net cash used in financing activities

 

(8,938

)

(39,056

)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

35,971

 

(15,157

)

Cash and cash equivalents - beginning of period

 

59,334

 

86,122

 

Cash and cash equivalents - end of period

 

$

95,305

 

$

70,965

 

 



 

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

 

 

 

2016

 

2015

 

vs LY

 

2016

 

2015

 

vs LY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant openings

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

6

 

6

 

0

 

11

 

8

 

3

 

Company - Bubba’s 33

 

1

 

2

 

(1

)

3

 

3

 

0

 

Company - Other

 

0

 

1

 

(1

)

0

 

1

 

(1

)

Franchise - Texas Roadhouse

 

1

 

1

 

0

 

2

 

1

 

1

 

Total

 

8

 

10

 

(2

)

16

 

13

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurants open at the end of the quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

403

 

376

 

27

 

 

 

 

 

 

 

Company - Bubba’s 33

 

10

 

6

 

4

 

 

 

 

 

 

 

Company - Other

 

2

 

2

 

0

 

 

 

 

 

 

 

Franchise - Texas Roadhouse

 

84

 

80

 

4

 

 

 

 

 

 

 

Total

 

499

 

464

 

35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

504,630

 

$

450,692

 

12.0

%

$

1,015,914

 

$

906,985

 

12.0

%

Store weeks

 

5,350

 

4,934

 

8.4

%

10,612

 

9,790

 

8.4

%

Comparable restaurant sales growth (1)

 

4.5

%

8.2

%

 

 

4.5

%

8.5

%

 

 

Texas Roadhouse restaurants only:

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurant sales growth (1)

 

4.5

%

8.2

%

 

 

4.5

%

8.5

%

 

 

Average unit volume (2)

 

$

1,232

 

$

1,188

 

3.7

%

$

2,505

 

$

2,409

 

4.0

%

Weekly sales by group:

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurants (361 units)

 

$

95,434

 

 

 

 

 

 

 

 

 

 

 

Average unit volume restaurants (24 units) (3)

 

$

84,272

 

 

 

 

 

 

 

 

 

 

 

Restaurants less than 6 months old (18 units)

 

$

98,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant operating costs (as a % of restaurant sales)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

34.0

%

37.3

%

(330

)bps

33.9

%

36.2

%

(224

)bps

Labor

 

29.7

%

29.3

%

42

bps

29.3

%

29.1

%

24

bps

Rent

 

2.0

%

2.0

%

(1

)bps

2.0

%

2.0

%

(1

)bps

Other operating

 

15.0

%

15.2

%

(13

)bps

15.1

%

15.2

%

(7

)bps

Total

 

80.8

%

83.8

%

(302

)bps

80.3

%

82.4

%

(208

)bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant margin (4)

 

19.2

%

16.2

%

302

bps

19.7

%

17.6

%

208

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant margin $(in thousands)

 

$

96,994

 

$

73,035

 

32.8

%

$

199,965

 

$

159,648

 

25.3

%

Restaurant margin $/Store week

 

$

18,130

 

$

14,804

 

22.5

%

$

18,843

 

$

16,307

 

15.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise royalties and fees

 

$

4,178

 

$

4,006

 

4.3

%

$

8,453

 

$

7,943

 

6.4

%

Store weeks

 

1,088

 

1,032

 

5.4

%

2,157

 

2,059

 

4.8

%

Comparable restaurant sales growth (1)

 

2.6

%

6.9

%

 

 

2.8

%

7.5

%

 

 

Average unit volume (2)

 

$

1,273

 

$

1,274

 

(0.1

)%

$

2,590

 

$

2,580

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-opening expense

 

$

4,411

 

$

4,909

 

(10.1

)%

$

9,236

 

$

8,727

 

5.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

20,238

 

$

16,816

 

20.3

%

$

39,777

 

$

33,151

 

20.0

%

As a% of revenue

 

4.0

%

3.7

%

28

bps

3.9

%

3.6

%

26

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

$

26,711

 

$

23,620

 

13.1

%

$

56,771

 

$

45,417

 

25.0

%

As a% of revenue

 

5.2

%

5.2

%

6

bps

5.5

%

5.0

%

58

bps

 


(1)  Comparable restaurant sales growth reflects the change in year-over-year sales for restaurants open a full 18 months before the beginning of the period measured, excluding sales from restaurants closed during the period.

(2)  Average unit volume includes sales from Texas Roadhouse restaurants open for a full six months before the beginning of the period measured, excluding any sales at restaurants closed during the period.

(3)  Average unit volume restaurants include restaurants open a full six to 18 months before the beginning of the period measured.

(4)  Restaurant margin represents restaurant sales less restaurant operating costs, including cost of sales, labor, rent and other operating costs (as a percentage of restaurant sales).  Depreciation and amortization expense, substantially all of which relates to restaurant-level asset, is excluded from restaurant operating costs.  Restaurant margin is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance.  Restaurant margin is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to income from operations or other similarly titled measures of other companies.

 

Amounts may not foot due to rounding.