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8-K - 8-K - Texas Roadhouse, Inc.a12-25951_18k.htm

Exhibit 99.1

 

Texas Roadhouse, Inc. Announces Third Quarter 2012 Results

 

LOUISVILLE, KY. (November 1, 2012) — Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 week periods ended September 25, 2012.

 

 

 

Third Quarter

 

Year to Date

 

($000’s)

 

2012

 

2011

 

% Change

 

2012

 

2011

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

308,656

 

269,253

 

15

 

953,800

 

832,610

 

15

 

Income from operations (1)

 

27,734

 

23,072

 

20

 

88,383

 

77,029

 

15

 

Net income (1)

 

18,067

 

15,798

 

14

 

57,246

 

51,667

 

11

 

Diluted EPS (1)

 

$

0.25

 

$

0.22

 

15

 

$

0.80

 

$

0.71

 

13

 

 


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

 

Results for the third quarter included:

 

·                  Comparable restaurant sales increased 3.6% at company restaurants and 4.9% at franchise restaurants;

·                  Three company restaurants were opened;

·                  Restaurant margins, as a percentage of restaurant sales, decreased 8 basis points to 17.9%; and

·                  Diluted earnings per share increased 15% to $0.25 from $0.22 in the prior year.

 

Results year-to-date included:

 

·                  Comparable restaurant sales increased 4.8% at company restaurants and 5.5% at franchise restaurants;

·                  18 company restaurants were opened;

·                  Restaurant margins, as a percentage of restaurant sales, increased 24 basis points to 18.7%;

·                  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; and

·                  Before the previously disclosed first quarter charge, diluted earnings per share increased 18% to $0.84 from $0.71 in the prior year.

 

Kent Taylor, Chief Executive Officer of Texas Roadhouse, commented, “We are pleased to report double-digit revenue and earnings per share growth in the third quarter, despite a challenging consumer environment and continued commodity cost pressures.  Our success is a direct result of our operators’ dedication to delivering legendary food and legendary service to our guests.  Development remains on track in 2012 with approximately 25 new company openings and we expect to increase that number to approximately 28 new company restaurants in 2013.  We will continue to focus on our long-term growth potential and brand positioning, and we are pleased that our strong balance sheet and cash flow allow us to internally fund our new restaurant growth and return excess capital to shareholders through dividends and share repurchases.”

 

2012 Outlook

 

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its fourth quarter of fiscal 2012 increased approximately 3.0% compared to the prior year period.

 



 

The Company updated its guidance to the high end of the previous range of $0.94 to $0.96 for GAAP diluted earnings per share for 2012, which includes the legal settlement charge discussed below.  This compares to diluted earnings per share of $0.88 in 2011.  This full year guidance is based, in part, on the following assumptions and other information:

 

·                  Comparable restaurant sales growth of 4.0% to 4.5%;

·                  Approximately 25 company restaurant openings;

·                  Food cost inflation of 6.5% to 7.0% compared to our previous expectation of 7.0%;

·                  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; and

·                  Total capital expenditures of approximately $90.0 million.

 

2013 Outlook

 

While the Company is still finalizing its plans related to 2013, management is providing the following preliminary expectations:

 

·                  Positive comparable restaurant sales growth;

·                  Approximately 28 company restaurant openings;

·                  Food cost inflation of 5.0% to 8.0%;

·                  An income tax rate of 32.5% to 33.0%;

·                  Total capital expenditures of $100.0 to $110.0 million.

 

Conference Call

 

The Company is hosting a conference call today, November 1, 2012, at 5:00 p.m. Eastern Time to discuss these results.  The dial-in number is (800) 401-3551 or (913) 312-0833 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 9444415 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 385 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

 

39 Weeks Ended

 

 

 

September 25,
2012

 

September 27,
2011

 

September 25,
2012

 

September 27,
2011

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

306,025

 

$

266,874

 

$

945,583

 

$

825,283

 

Franchise royalties and fees

 

2,631

 

2,379

 

8,217

 

7,327

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

308,656

 

269,253

 

953,800

 

832,610

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Restaurant operating costs:

 

 

 

 

 

 

 

 

 

Cost of sales

 

102,930

 

88,944

 

319,445

 

274,751

 

Labor

 

91,507

 

78,919

 

278,089

 

244,551

 

Rent

 

6,489

 

5,796

 

19,120

 

17,153

 

Other operating

 

50,183

 

45,112

 

151,967

 

136,331

 

Pre-opening

 

2,458

 

3,327

 

8,823

 

7,413

 

Depreciation and amortization

 

11,828

 

10,571

 

34,721

 

31,724

 

Impairment and closure

 

24

 

13

 

63

 

59

 

General and administrative

 

15,503

 

13,499

 

53,189

 

43,599

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

280,922

 

246,181

 

865,417

 

755,581

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

27,734

 

23,072

 

88,383

 

77,029

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

603

 

669

 

1,776

 

1,776

 

Equity income from investments in unconsolidated affiliates

 

141

 

71

 

303

 

271

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

27,272

 

22,474

 

86,910

 

75,524

 

Provision for income taxes

 

8,778

 

6,058

 

27,815

 

21,934

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests (1)

 

$

18,494

 

$

16,416

 

$

59,095

 

$

53,590

 

Less: Net income attributable to noncontrolling interests

 

427

 

618

 

1,849

 

1,923

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

$

18,067

 

$

15,798

 

$

57,246

 

$

51,667

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

$

0.26

 

$

0.22

 

$

0.82

 

$

0.72

 

Diluted

 

$

0.25

 

$

0.22

 

$

0.80

 

$

0.71

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

70,482

 

70,800

 

70,004

 

71,370

 

Diluted

 

71,928

 

72,186

 

71,480

 

72,903

 

 


(1) Results for the 39 weeks ended September 25, 2012 include a $5.0 million charge, 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)

 

 

 

 

 

September 25, 2012

 

December 27, 2011

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

84,320

 

$

73,731

 

Other current assets

 

34,050

 

38,243

 

Property and equipment, net

 

523,482

 

497,217

 

Goodwill

 

110,946

 

110,946

 

Intangible assets, net

 

8,235

 

9,042

 

Other assets

 

13,464

 

11,491

 

 

 

 

 

 

 

Total assets

 

$

774,497

 

$

740,670

 

 

 

 

 

 

 

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

 

329

 

304

 

Other current liabilities

 

120,324

 

136,068

 

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

 

51,352

 

61,601

 

Other liabilities

 

47,176

 

46,875

 

Texas Roadhouse, Inc. and subsidiaries stockholders’ equity

 

549,916

 

491,904

 

Noncontrolling interests

 

5,400

 

3,918

 

 

 

 

 

 

 

Total liabilities and equity

 

$

774,497

 

$

740,670

 

 

 

 

 

 

 

 



 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

39 Weeks Ended

 

 

 

September 25,
2012

 

September 25,
2011

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net income including noncontrolling interests

 

$

59,095

 

$

53,590

 

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

 

 

 

 

 

Depreciation and amortization

 

34,721

 

31,724

 

Share-based compensation expense

 

9,754

 

8,151

 

Other noncash adjustments

 

(3,630

)

1,145

 

Change in working capital

 

(7,675

)

(13,601

)

Net cash provided by operating activities

 

92,265

 

81,009

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Capital expenditures - property and equipment

 

(63,146

)

(51,839

)

Proceeds from sale of property and equipment, including insurance proceeds

 

255

 

171

 

Net cash used in investing activities

 

(62,891

)

(51,668

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

(Repayments) of revolving credit facility, net

 

(10,000

)

 

Repurchase shares of common stock

 

 

(46,445

)

Dividends paid

 

(18,134

)

(11,399

)

Other financing activities

 

9,349

 

1,961

 

Net cash used in financing activities

 

(18,785

)

(55,883

)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

10,589

 

(26,542

)

Cash and cash equivalents - beginning of year

 

73,731

 

82,215

 

Cash and cash equivalents - end of year

 

$

84,320

 

$

55,673

 

 



 

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

 

 

 

2012

 

2011

 

vs LY

 

2012

 

2011

 

vs LY

 

Restaurant openings

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

3

 

5

 

(2

)

18

 

10

 

8

 

Company - Aspen Creek

 

0

 

0

 

0

 

0

 

0

 

0

 

Franchise - Texas Roadhouse

 

0

 

1

 

(1

)

0

 

1

 

(1

)

Total

 

3

 

6

 

(3

)

18

 

11

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurants open at the end of the quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

309

 

281

 

28

 

 

 

 

 

 

 

Company - Aspen Creek

 

3

 

3

 

0

 

 

 

 

 

 

 

Franchise - Texas Roadhouse

 

72

 

72

 

0

 

 

 

 

 

 

 

Total

 

384

 

356

 

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

306,025

 

$

266,874

 

14.7

%

$

945,583

 

$

825,283

 

14.6

%

Store weeks

 

4,041

 

3,643

 

10.9

%

11,854

 

10,818

 

9.6

%

Comparable restaurant sales growth (1)

 

3.6

%

4.0

%

 

 

4.8

%

4.4

%

 

 

Texas Roadhouse restaurants only:

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurant sales growth (1)

 

3.6

%

4.1

%

 

 

4.8

%

4.4

%

 

 

Average unit volume (2)

 

$

983

 

$

952

 

3.3

%

$

3,102

 

$

2,972

 

4.4

%

Weekly sales by group:

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurants (271 units)

 

$

75,846

 

 

 

 

 

 

 

 

 

 

 

Average unit volume restaurants (20 units)

 

$

72,928

 

 

 

 

 

 

 

 

 

 

 

Restaurants less than 6 months old (18 units)

 

$

81,117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant operating costs (as a % of restaurant sales)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

33.6

%

33.3

%

31

 bps

33.8

%

33.3

%

49

 bps

Labor

 

29.9

%

29.6

%

33

 bps

29.4

%

29.6

%

(22

) bps

Rent

 

2.1

%

2.2

%

(5

) bps

2.0

%

2.1

%

(6

) bps

Other operating

 

16.4

%

16.9

%

(51

) bps

16.1

%

16.5

%

(45

) bps

Total

 

82.1

%

82.0

%

8

 bps

81.3

%

81.5

%

(24

) bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant margins (3)

 

17.9

%

18.0

%

(8

) bps

18.7

%

18.5

%

24

 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise royalties and fees

 

$

2,631

 

$

2,379

 

10.6

%

$

8,217

 

$

7,327

 

12.1

%

Store weeks

 

936

 

927

 

1.0

%

2,808

 

2,773

 

1.3

%

Comparable restaurant sales growth (1)

 

4.9

%

3.7

%

 

 

5.5

%

3.9

%

 

 

Average unit volume (2)

 

$

998

 

$

935

 

6.7

%

$

3,073

 

$

2,906

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-opening expense

 

$

2,458

 

$

3,327

 

(26.1

)%

$

8,823

 

$

7,413

 

19.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

11,828

 

$

10,571

 

11.9

%

$

34,721

 

$

31,724

 

9.4

%

As a % of revenue

 

3.8

%

3.9

%

(9

) bps

3.6

%

3.8

%

(17

) bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses (4)

 

$

15,503

 

$

13,499

 

14.8

%

$

53,189

 

$

43,599

 

22.0

%

As a % of revenue

 

5.0

%

5.0

%

1

 bps

5.6

%

5.2

%

34

 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 39 weeks ended September 25, 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 further 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 impact of 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 39 weeks ended September 25, 2012.

 

 

 

For the 39 weeks ended

 

 

 

September 25,
2012

 

September 27,
2011

 

 

 

 

 

 

 

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

 

$

60,308

 

$

51,667

 

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

 

$

(3,062

)

$

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

$

57,246

 

$

51,667

 

 

 

 

 

 

 

Weighted average diluted shares outstanding

 

71,480

 

72,903

 

 

 

 

 

 

 

Diluted earnings per share, excluding settlement charge

 

$

0.84

 

$

0.71

 

Impact of settlement charge on diluted earnings per share

 

$

(0.04

)

$

 

 

 

$

0.80

 

$

0.71

 

 


(1)          Amount reserved in the first quarter of 2012 for the settlement of a legal matter was $5.0 million before the statutory income tax rate.  The settlement is included in general administrative costs in our condensed consolidated statements of income and comprehensive income.