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8-K - 8-K - Texas Roadhouse, Inc.a10-4364_18k.htm

Exhibit 99.1

 

Texas Roadhouse, Inc. Announces Fourth Quarter 2009 Results

 

LOUISVILLE, Ky (February 22, 2010) — Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 week periods ended December 29, 2009.

 

 

 

Fourth Quarter

 

Year to Date

 

($000’s)

 

2009

 

2008

 

% Change

 

2009

 

2008

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

227,368

 

234,202

 

(3

)

942,331

 

880,461

 

7

 

Income from operations

 

14,803

 

10,866

 

36

 

75,861

 

62,027

 

22

 

Net income

 

8,709

 

6,139

 

42

 

47,479

 

38,168

 

24

 

Diluted EPS

 

$

0.12

 

$

0.09

 

40

 

$

0.67

 

$

0.52

 

29

 

 

NOTE> Q4 2008 and 2008 YTD include 14 and 53 weeks, respectively, compared to 13 and 52 weeks in Q4 2009 and 2009 YTD.  The 53rd week in 2008 YTD added $18.0 million to total weeks in Q4 2009 and 2009 YTD.  The extra week in 2008 added $18.0 million to total revenues and approximately $0.03 to diluted earnings per share for Q4 2008 and 2008 YTD.

 

Results for the fourth quarter:

 

·                  Comparable restaurant sales decreased 2.6% at company restaurants and 1.2% at franchise restaurants;

·                  Five company restaurants opened and one franchise restaurant was acquired;

·                  Restaurant margins increased 237 basis points to 17.4%;

·                  Diluted earnings per share increased 40% to $0.12 from $0.09 in the prior year period.

 

Results for the full year:

 

·                  Comparable restaurant sales decreased 2.8% at company restaurants and 2.5% at franchise restaurants;

·                  17 company restaurants and 3 franchise restaurants opened and one franchise restaurant was acquired;

·                  Restaurant margins increased 71 basis points to 17.7%;

·                  Diluted earnings per share increased 29% to $0.67 from $0.52 in the prior year period.

 

G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, “Sales trends continued to improve throughout the fourth quarter and, combined with a favorable commodities environment, we were able to generate our third consecutive quarter of year-over-year restaurant margin improvement.  This drove profitability for the period and capped off a year where earnings per diluted share increased 29%, solidly exceeding our expectations.  Looking to 2010 and beyond, we continue to believe Texas Roadhouse is well-positioned to gain market share based on our ongoing commitment to the basics of providing Legendary Food and Legendary Service.  In addition, we remain committed to maintaining a conservative balance sheet.”

 



 

Outlook for 2010

 

The Company reported that comparable restaurant sales for the first seven weeks of fiscal 2010 decreased approximately 1.2% compared to the same period a year ago.

 

The Company estimates 2010 diluted earnings per share growth will be 5% to 10% compared to 2009.  This estimate is based, in part, on the following assumptions:

 

·                  Comparable restaurant sales of negative 2% to flat;

·                  Approximately 15 company restaurant openings;

·                  Food cost deflation of approximately 2.5% to 3.0%; and

·                  Total capital expenditures of between $50-55 million.

 

Extension of Executive Officer Employment Contracts

 

On February 18, 2010, the Company amended the employment agreements of W. Kent Taylor, Chairman; G.J. Hart, President and Chief Executive Officer; Steven L. Ortiz, Chief Operating Officer; Scott M. Colosi, Chief Financial Officer; and Sheila C. Brown, General Counsel and Corporate Secretary.  The amendments extended the term of each officer’s employment from January 7, 2011 until January 7, 2012 during which time each officer’s annual base salary and target bonuses will remain unchanged.

 

James F. Parker, Chair of the Compensation Committee of the Board of Directors commented, “The Board is delighted that the executive officers have agreed to extend the terms of their contracts for another year.  This management team has functioned extremely well together for many years, and the Board believes the Company will be well-served by having the team remain together.  Additionally, by maintaining salaries and bonuses at current levels, the Board of Directors and officers have shown a commitment to shareholders through sound fiscal practices.”

 

Conference Call

 

The Company is hosting a conference call today, February 22, 2010, at 5:00 p.m. Eastern Time to discuss these results.  The dial-in number is (877) 856-1965 or (719) 325-4793 for international calls. A replay of the call will be available for one week following the conference call.  To access the replay, please dial (888) 203-1112 or (719) 457-0820 for international calls, and use 7946126 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 300 restaurants system-wide in 46 states.  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 operating costs, our ability to acquire franchise restaurants, our ability to integrate the franchise restaurants we acquire or other concepts we develop, strength of consumer spending 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

Price Cooper

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

 

14 Weeks

 

52 Weeks

 

53 Weeks

 

 

 

Ended

 

Ended

 

Ended

 

Ended

 

 

 

December 29,

 

December 30,

 

December 29,

 

December 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

225,292

 

$

232,429

 

$

934,100

 

$

871,556

 

Franchise royalties and fees

 

2,076

 

1,773

 

8,231

 

8,905

 

Total revenue

 

227,368

 

234,202

 

942,331

 

880,461

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Restaurant operating costs:

 

 

 

 

 

 

 

 

 

Cost of sales

 

74,956

 

82,918

 

312,800

 

308,123

 

Labor

 

66,423

 

69,136

 

276,626

 

253,132

 

Rent

 

5,148

 

4,741

 

20,018

 

15,879

 

Other operating

 

39,511

 

40,651

 

158,961

 

146,019

 

Pre-opening

 

1,402

 

2,631

 

5,813

 

11,604

 

Depreciation and amortization

 

10,340

 

10,638

 

41,822

 

37,694

 

Impairment and closure

 

3,273

 

1,398

 

3,000

 

2,175

 

General and administrative

 

11,512

 

11,223

 

47,430

 

43,808

 

Total costs and expenses

 

212,565

 

223,336

 

866,470

 

818,434

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

14,803

 

10,866

 

75,861

 

62,027

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

756

 

1,508

 

3,273

 

3,844

 

Equity income from investments in unconsolidated affiliates

 

36

 

31

 

221

 

215

 

Income before taxes

 

14,083

 

9,389

 

72,809

 

58,398

 

Provision for income taxes

 

4,909

 

2,891

 

23,491

 

19,389

 

Net income including noncontrolling interests

 

$

9,174

 

$

6,498

 

$

49,318

 

$

39,009

 

Less: Net income attributable to noncontrolling interests

 

465

 

359

 

1,839

 

841

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

$

8,709

 

$

6,139

 

$

47,479

 

$

38,168

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

$

0.12

 

$

0.09

 

$

0.68

 

$

0.53

 

Diluted

 

$

0.12

 

$

0.09

 

$

0.67

 

$

0.52

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

70,341

 

69,923

 

69,967

 

72,672

 

Diluted

 

71,709

 

70,915

 

71,298

 

74,079

 

 



 

 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet

(in thousands)

 

 

 

December 29, 2009

 

December 30, 2008

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

46,858

 

$

5,258

 

Other current assets

 

27,458

 

29,550

 

Property and equipment, net

 

456,281

 

456,132

 

Goodwill

 

113,465

 

114,807

 

Intangible asset, net

 

11,194

 

12,807

 

Other assets

 

6,817

 

4,109

 

 

 

 

 

 

 

Total assets

 

$

 662,073

 

$

622,663

 

 

 

 

 

 

 

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

 

247

 

228

 

Other current liabilities

 

107,956

 

99,415

 

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

 

101,179

 

132,482

 

Other liabilities

 

29,741

 

27,741

 

Texas Roadhouse, Inc. and subsidiaries stockholders’ equity

 

420,372

 

359,990

 

Noncontrolling interests

 

2,578

 

2,807

 

 

 

 

 

 

 

Total liabilities and equity

 

$

662,073

 

$

622,663

 

 



 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands, except per share data)

(unaudited)

 

 

 

Fiscal Year Ended

 

 

 

December 29,

 

December 30,

 

 

 

2009

 

2008

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net income including noncontrolling interests

 

$

49,318

 

$

39,009

 

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

 

 

 

 

 

Depreciation and amortization

 

41,822

 

37,694

 

Share-based compensation expense

 

7,493

 

7,745

 

Other noncash adjustments

 

4,453

 

5,157

 

Change in working capital

 

12,043

 

11,609

 

Net cash provided by operating activities

 

115,129

 

101,214

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Capital expenditures - property and equipment

 

(45,516

)

(102,536

)

Acquisition of franchise restaurants, net of cash acquired

 

25

 

(17,835

)

Proceeds from sale of property and equipment, including insurance proceeds

 

2,357

 

250

 

Investment in equity investees

 

 

(95

)

Net cash used in investing activities

 

(43,134

)

(120,216

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

(Repayments)/proceeds from revolving credit facility, net

 

(31,000

)

67,000

 

Repurchase of shares of common stock

 

 

(56,974

)

Other financing activities

 

605

 

2,670

 

Net cash (used in)/provided by financing activities

 

(30,395

)

12,696

 

 

 

 

 

 

 

Net increase (decrease) in cash

 

41,600

 

(6,306

)

Cash and cash equivalents - beginning of year

 

5,258

 

11,564

 

Cash and cash equivalents - end of year

 

$

46,858

 

$

5,258

 

 



 

Supplemental Financial and Operating Information

($ amounts in thousands)

(unaudited)

 

 

 

Fourth Quarter

 

Change

 

Year to Date

 

Change

 

 

 

2009

 

2008

 

vs LY

 

2009

 

2008

 

vs LY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant openings

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

5

 

6

 

(1

)

17

 

29

 

(12

)

Franchise

 

0

 

0

 

0

 

3

 

1

 

2

 

Total

 

5

 

6

 

(1

)

20

 

30

 

(10

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

1

 

1

 

0

 

1

 

13

 

(12

)

Franchise

 

(1

)

(1

)

0

 

(1

)

(13

)

12

 

Total

 

0

 

0

 

0

 

0

 

0

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant closures

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

0

 

0

 

0

 

(2

)

(1

)

(1

)

Franchise

 

0

 

0

 

0

 

(1

)

0

 

(1

)

Total

 

0

 

0

 

0

 

(3

)

(1

)

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurants open at the end of the quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

261

 

245

 

16

 

 

 

 

 

 

 

Franchise

 

70

 

69

 

1

 

 

 

 

 

 

 

Total

 

331

 

314

 

17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

 225,292

 

$

 232,429

 

(3.1

)%

$

 934,100

 

$

 871,556

 

7.2

%

Store weeks

 

3,362

 

3,389

 

(0.8

)%

13,255

 

11,861

 

11.8

%

Comparable restaurant sales growth (1)

 

(2.6

)%

(4.7

)%

 

 

(2.8

)%

(2.3

)%

 

 

Average unit volume (2)

 

$

 864

 

$

 893

 

(3.2

)%

$

 3,660

 

$

 3,823

 

(4.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant operating costs (as a % of restaurant sales)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

33.3

%

35.7

%

(240

)bps

33.5

%

35.4

%

(187

)bps

Labor

 

29.5

%

29.7

%

(26

)bps

29.6

%

29.0

%

57

bps

Rent

 

2.3

%

2.0

%

25

bps

2.1

%

1.8

%

32

bps

Other operating

 

17.5

%

17.5

%

5

bps

17.0

%

16.8

%

26

bps

Total

 

82.6

%

84.9

%

(237

)bps

82.3

%

83.0

%

(71

)bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant margins (3)

 

17.4

%

15.1

%

237

bps

17.7

%

17.0

%

71

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise royalties and fees

 

$

 2,076

 

$

 1,773

 

17.1

%

$

 8,231

 

$

 8,905

 

(7.6

)%

Store weeks

 

919

 

966

 

(4.9

)%

3,613

 

4,007

 

(9.8

)%

Comparable restaurant sales growth (1)

 

(1.2

)%

(5.5

)%

 

 

(2.5

)%

(3.6

)%

 

 

Average unit volume (2)

 

$

 849

 

$

860

 

(1.3

)%

$

 3,529

 

$

 3,618

 

(2.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-opening expense

 

$

 1,402

 

$

 2,631

 

(46.7

)%

$

 5,813

 

$

 11,604

 

(49.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

 10,340

 

$

 10,638

 

(2.8

)%

$

 41,822

 

$

 37,694

 

11.0

%

As a % of revenue

 

4.5

%

4.5

%

1

bps

4.4

%

4.3

%

16

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment and closure

 

$

 3,273

 

$

 1,398

 

134.1

%

$

 3,000

 

$

 2,175

 

37.9

%

As a % of revenue

 

1.4

%

0.6

%

84

bps

0.3

%

0.2

%

7

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

$

 11,512

 

$

 11,223

 

2.6

%

$

 47,430

 

$

 43,808

 

8.3

%

As a % of revenue

 

5.1

%

4.8

%

27

bps

5.0

%

5.0

%

6

bps

 


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

 

(2)  Average unit volume includes sales from restaurants open six months as of the beginning of the measurement period.  Q4 2008 and 2008 YTD were adjusted to include 13 and 52 weeks, respectively.  For comparative purposes, average unit volumes for Q4 2008 and 2008 YTD were adjusted to reflect restaurant sales of any acquired franchise restaurants as part of Company-owned restaurants average unit volume and were excluded from franchise-owned restaurants average unit volume.

 

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

 

Amounts may not foot due to rounding.