EX-99.1 2 a15-22199_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Texas Roadhouse, Inc. Announces Third Quarter 2015 Results

 

LOUISVILLE, KY. (November 2, 2015) — Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 week periods ended September 29, 2015.

 

 

 

Third Quarter

 

Year to Date

 

($000’s)

 

2015

 

2014

 

% Change

 

2015

 

2014

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

438,089

 

$

385,218

 

14

 

$

1,353,017

 

$

1,177,723

 

15

 

Income from operations

 

30,556

 

28,821

 

6

 

110,852

 

103,406

 

7

 

Net income

 

20,482

 

18,881

 

8

 

73,912

 

68,427

 

8

 

Diluted EPS

 

$

0.29

 

$

0.27

 

8

 

$

1.05

 

$

0.97

 

8

 

 

Results for the third quarter included the following highlights:

 

·                  Comparable restaurant sales increased 6.9% at company restaurants and 7.7% at franchise restaurants;

·                  Restaurant margin, as a percentage of restaurant sales, decreased 22 basis points to 16.6%, primarily driven by higher labor costs.  Wage rate inflation, along with higher healthcare costs, more than offset the impact of higher average unit volume;

·                  Diluted earnings per share increased 8.0% to $0.29 from $0.27 in the prior year;

·                  10 company-owned restaurants were opened, including one Bubba’s 33 restaurant; and,

·                  The Company repurchased 44,000 shares of its common stock for $1.6 million.

 

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

 

·                  Comparable restaurant sales increased 8.1% at company restaurants and 7.4% at franchise restaurants;

·                  Restaurant margin, as a percentage of restaurant sales, decreased 78 basis points to 17.3%.  Food cost inflation of approximately 6.0% driven by beef, more than offset the impact of higher average unit volume;

·                  Diluted earnings per share increased 8.0% to $1.05 from $0.97 in the prior year;

·                  22 company-owned restaurants were opened, including four Bubba’s 33 restaurants; and,

·                  The Company repurchased 132,089 shares of its common stock for $4.7 million.

 

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “We are pleased with our third quarter results, which included double digit revenue growth comprised of solid comparable restaurant sales growth of 6.9% and store week growth of 7.7% from new restaurant development.  Our performance continues to be driven by our commitment to legendary food and legendary service.”

 

Taylor continued, “Our new restaurant pipeline is strong and we remain on track with our development plans for 2015 and 2016.  The consistency of our business and our healthy cash flow generation allows us to fund our new restaurant growth through internal cash flow, while also returning excess capital to our shareholders through dividends and share repurchases, driving further shareholder value.”

 

2015 Outlook

 

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its fourth quarter of fiscal 2015 increased approximately 5.0% compared to the prior year period.

 


 

Management updated the following expectations for 2015:

 

·                  Approximately 30 company restaurant openings, including four Bubba’s 33 restaurants (from as many as five Bubba’s 33 restaurants previously);

·                  Food cost inflation of approximately 5.0% (from 4.0% to 4.5% previously);

·                  An income tax rate of approximately 30.0% to 30.5%, depending on the reinstatement of certain federal tax credits (from 30.0% to 31.0% previously); and,

·                  Total capital expenditures of approximately $160.0 million (from $145.0 million to $155.0 million previously).

 

Management reiterated the following expectation for 2015:

 

·                  Mid-single digit comparable restaurant sales growth.

 

2016 Outlook

 

Management provided the following expectations for 2016:

 

·                  Positive comparable restaurant sales growth;

·                  25 to 30 company restaurant openings, including at least five Bubba’s 33 restaurants;

·                  Low-single digit food cost deflation;

·                  An income tax rate of 30.0% to 31.0%, depending on the reinstatement of certain federal tax credits; and,

·                  Total capital expenditures of $155.0 million to $165.0 million.

 

Conference Call

 

The Company is hosting a conference call today, November 2, 2015 at 5:00 p.m. Eastern Time to discuss these results.  The dial-in number is (877) 604-9668 or (719) 325-4794 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 2485478 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 480 restaurants system-wide in 49 states and four 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; 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

 

39 Weeks Ended

 

 

 

September 29,
2015

 

September 30,
2014

 

September 29,

2015

 

September 30,
2014

 

Revenue:

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

433,932

 

$

381,991

 

$

1,340,917

 

$

1,167,766

 

Franchise royalties and fees

 

4,157

 

3,227

 

12,100

 

9,957

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

438,089

 

385,218

 

1,353,017

 

1,177,723

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

156,643

 

137,658

 

484,700

 

409,552

 

Labor

 

129,198

 

112,521

 

392,686

 

342,375

 

Rent

 

9,325

 

8,380

 

27,442

 

24,550

 

Other operating

 

66,848

 

59,276

 

204,523

 

180,491

 

Pre-opening

 

5,749

 

3,945

 

14,476

 

12,677

 

Depreciation and amortization

 

17,843

 

15,164

 

50,994

 

43,682

 

Impairment and closure

 

—

 

(16

)

—

 

10

 

General and administrative

 

21,927

 

19,469

 

67,344

 

60,980

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

407,533

 

356,397

 

1,242,165

 

1,074,317

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

30,556

 

28,821

 

110,852

 

103,406

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

470

 

492

 

1,480

 

1,564

 

Equity income from investments in unconsolidated affiliates

 

449

 

410

 

1,288

 

975

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

30,535

 

28,739

 

110,660

 

102,817

 

Provision for income taxes

 

9,141

 

9,017

 

33,419

 

31,462

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

21,394

 

$

19,722

 

$

77,241

 

$

71,355

 

Less: Net income attributable to noncontrolling interests

 

912

 

841

 

3,329

 

2,928

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

$

20,482

 

$

18,881

 

$

73,912

 

$

68,427

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

$

0.29

 

$

0.27

 

$

1.06

 

$

0.98

 

Diluted

 

$

0.29

 

$

0.27

 

$

1.05

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

70,117

 

69,544

 

69,995

 

69,793

 

Diluted

 

70,735

 

70,395

 

70,639

 

70,639

 

 


 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

September 29, 2015

 

December 30, 2014

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

72,616

 

$

86,122

 

Other current assets

 

48,972

 

61,604

 

Property and equipment, net

 

723,294

 

649,637

 

Goodwill

 

116,571

 

116,571

 

Intangible assets, net

 

5,171

 

6,203

 

Other assets

 

25,847

 

23,005

 

 

 

 

 

 

 

Total assets

 

$

992,471

 

$

943,142

 

 

 

 

 

 

 

Current maturities of long-term debt

 

20,140

 

129

 

Other current liabilities

 

195,122

 

215,842

 

Long-term debt, excluding current maturities

 

50,587

 

50,693

 

Other liabilities

 

61,112

 

61,522

 

Texas Roadhouse, Inc. and subsidiaries stockholders’ equity

 

658,309

 

607,892

 

Noncontrolling interests

 

7,201

 

7,064

 

 

 

 

 

 

 

Total liabilities and equity

 

$

992,471

 

$

943,142

 

 


 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

39 Weeks Ended

 

 

 

September 29, 2015

 

September 30, 2014

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net income including noncontrolling interests

 

$

77,241

 

$

71,355

 

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

 

 

 

 

 

Depreciation and amortization

 

50,994

 

43,682

 

Share-based compensation expense

 

15,649

 

10,937

 

Other noncash adjustments

 

(5,066

)

(1,392

)

Change in working capital

 

(8,939

)

(7,277

)

Net cash provided by operating activities

 

129,879

 

117,305

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Capital expenditures - property and equipment

 

(123,471

)

(89,645

)

Proceeds from sale of property and equipment, including insurance proceeds

 

272

 

1,197

 

Net cash used in investing activities

 

(123,199

)

(88,448

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from revolving credit facility

 

20,000

 

—

 

Repurchase shares of common stock

 

(4,741

)

(39,966

)

Dividends paid

 

(34,247

)

(20,923

)

Other financing activities

 

(1,198

)

(3,535

)

Net cash used in financing activities

 

(20,186

)

(64,424

)

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 (13,506

)

(35,567

)

Cash and cash equivalents - beginning of period

 

86,122

 

94,874

 

Cash and cash equivalents - end of period

 

$

72,616

 

$

59,307

 

 


 

Texas Roadhouse, Inc. and Subsidiaries

Supplemental Financial and Operating Information

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

(unaudited)

 

 

 

Third Quarter

 

Change

 

Year to Date

 

Change

 

 

 

2015

 

2014

 

vs LY

 

2015

 

2014

 

vs LY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant openings

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

9

 

3

 

6

 

17

 

15

 

2

 

Company - Bubba’s 33

 

1

 

0

 

1

 

4

 

0

 

4

 

Company - Jaggers

 

0

 

0

 

0

 

1

 

0

 

1

 

Franchise - Texas Roadhouse

 

1

 

0

 

1

 

2

 

1

 

1

 

Total

 

11

 

3

 

8

 

24

 

16

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurants open at the end of the quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

385

 

360

 

25

 

 

 

 

 

 

 

Company - Bubba’s 33

 

7

 

1

 

6

 

 

 

 

 

 

 

Company - Jaggers

 

2

 

0

 

2

 

 

 

 

 

 

 

Franchise - Texas Roadhouse

 

81

 

75

 

6

 

 

 

 

 

 

 

Total

 

475

 

436

 

39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

433,932

 

$

381,991

 

13.6

%

$

1,340,917

 

$

1,167,766

 

14.8

%

Store weeks

 

5,044

 

4,682

 

7.7

%

14,834

 

13,799

 

7.5

%

Comparable restaurant sales growth (1)

 

6.9

%

5.9

%

 

 

8.1

%

3.9

%

 

 

Texas Roadhouse restaurants only:

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurant sales growth (1)

 

6.9

%

5.9

%

 

 

8.1

%

3.9

%

 

 

Average unit volume (2)

 

$

1,119

 

$

1,050

 

6.6

%

$

3,531

 

$

3,267

 

8.1

%

Weekly sales by group:

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurants (346 units)

 

$

86,331

 

 

 

 

 

 

 

 

 

 

 

Average unit volume restaurants (22 units) (3)

 

$

82,555

 

 

 

 

 

 

 

 

 

 

 

Restaurants less than 6 months old (17 units)

 

$

92,082

 

 

 

 

 

 

 

 

 

 

 

Restaurant operating costs (as a % of restaurant sales)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

36.1

%

36.0

%

6

bps

36.1

%

35.1

%

108

bps

Labor

 

29.8

%

29.5

%

32

bps

29.3

%

29.3

%

(3

) bps

Rent

 

2.1

%

2.2

%

(4

) bps

2.0

%

2.1

%

(6

) bps

Other operating

 

15.4

%

15.5

%

(11

) bps

15.3

%

15.5

%

(20

) bps

Total

 

83.4

%

83.2

%

22

bps

82.7

%

81.9

%

78

bps

Restaurant margin (4)

 

16.6

%

16.8

%

(22

) bps

17.3

%

18.1

%

(78

) bps

Restaurant margin ($ in thousands)

 

$

71,917

 

$

64,156

 

12.1

%

$

231,566

 

$

210,798

 

9.9

%

Restaurant margin $/Store week

 

$

14,258

 

$

13,703

 

4.1

%

$

15,610

 

$

15,276

 

2.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise royalties and fees

 

$

4,157

 

$

3,227

 

28.8

%

$

12,100

 

$

9,957

 

21.5

%

Store weeks

 

1,052

 

975

 

7.9

%

3,112

 

2,912

 

6.9

%

Comparable restaurant sales growth (1)

 

7.7

%

5.2

%

 

 

7.4

%

4.4

%

 

 

Average unit volume (2)

 

$

1,205

 

$

1,134

 

6.2

%

$

3,808

 

$

3,473

 

9.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-opening expense

 

$

5,749

 

$

3,945

 

45.7

%

$

14,476

 

$

12,677

 

14.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

17,843

 

$

15,164

 

17.7

%

$

50,994

 

$

43,682

 

16.7

%

As a % of revenue

 

4.1

%

3.9

%

14

bps

3.8

%

3.7

%

6

bps

General and administrative expenses

 

$

21,927

 

$

19,469

 

12.6

%

$

67,344

 

$

60,980

 

10.4

%

As a % of revenue

 

5.0

%

5.1

%

(5

) bps

5.0

%

5.2

%

(20

) 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 sales from restaurants closed during the period.

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

(4)  Restaurant margin represents restaurant sales less cost of sales, labor, rent and other operating costs (as a percentage of restaurant sales).  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.