LOUISVILLE, Ky. (RestaurantNewsRelease.com) Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 29, 2010.
| Second Quarter | Year to Date | |||||||||||||||||
| ($000’s) | 2010 | 2009 | % Change | 2010 | 2009 | % Change | ||||||||||||
| Total revenue | 255,162 | 242,423 | 5 | 514,786 | 488,496 | 5 | ||||||||||||
| Income from operations | 23,329 | 21,494 | 9 | 53,435 | 43,777 | 22 | ||||||||||||
| Net income | 15,036 | 13,741 | 9 | 34,277 | 28,075 | 22 | ||||||||||||
| Diluted EPS | $0.21 | $0.19 | 7 | $0.47 | $0.40 | 19 | ||||||||||||
Results for the quarter included:
- Comparable restaurant sales increased 1.4% at company restaurants and 2.0% at franchise restaurants;
- One company restaurant and one franchise restaurant opened while one company restaurant closed;
- Restaurant margins increased 45 basis points to 18.8%;
- Diluted earnings per share increased 7% to $0.21 from $0.19 in the prior year period.
Results year-to-date included:
- Comparable restaurant sales increased 0.9% at company restaurants and 1.4% at franchise restaurants;
- Four company restaurants and one franchise restaurant opened while one company restaurant closed;
- Restaurant margins increased 132 basis points to 19.5%;
- Diluted earnings per share increased 19% to $0.47 from $0.40 in the prior period.
G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, “We are pleased to report another quarter of diluted earnings per share growth led by both positive comparable restaurant sales and continued restaurant-level margin expansion. Positive guest counts drove the increase in comparable restaurant sales, while lower commodity costs continued to pave the way for margin expansion. In addition, sales at our newer restaurants continue to perform at or above our expectations and we are experiencing lower new unit investment costs. Our goal is to continue driving positive traffic growth through our continued commitment to legendary food and service.”
Outlook for 2010
The Company reported that comparable restaurant sales for the first four weeks of the third quarter of fiscal 2010 increased 3.0% compared to the same period a year ago.
The Company estimates 2010 diluted earnings per share growth will be approximately 16% to 20% compared to 2009. This estimate is based, in part, on the following assumptions:
- Comparable restaurant sales growth of approximately 1.0%;
- 14 to 15 company restaurant openings;
- Food cost deflation of approximately 2.5% to 3.0%; and
- Total capital expenditures of approximately $50 million.
Conference Call
The Company is hosting a conference call today, August 2, 2010, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 723-9517 or (719) 325-4819 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 8534928 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 330 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 development or 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, 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.
| Texas Roadhouse, Inc. and Subsidiaries | ||||||||||||||
| Condensed Consolidated Statements of Income | ||||||||||||||
| (in thousands, except per share data) | ||||||||||||||
| (unaudited) | ||||||||||||||
| 13 Weeks Ended | 26 Weeks Ended | |||||||||||||
| June 29, 2010 | June 30, 2009 | June 29, 2010 | June 30, 2009 | |||||||||||
| Revenue: | ||||||||||||||
| Restaurant sales | $ | 252,835 | $ | 240,301 | $ | 510,177 | $ | 484,391 | ||||||
| Franchise royalties and fees | 2,327 | 2,122 | 4,609 | 4,105 | ||||||||||
| Total revenue | 255,162 | 242,423 | 514,786 | 488,496 | ||||||||||
| Costs and expenses: | ||||||||||||||
| Restaurant operating costs: | ||||||||||||||
| Cost of sales | 82,660 | 80,314 | 165,459 | 163,355 | ||||||||||
| Labor | 74,497 | 71,074 | 149,406 | 142,573 | ||||||||||
| Rent | 5,287 | 4,929 | 10,557 | 9,841 | ||||||||||
| Other operating | 42,767 | 39,812 | 85,365 | 80,672 | ||||||||||
| Pre-opening | 1,307 | 933 | 2,412 | 3,217 | ||||||||||
| Depreciation and amortization | 10,262 | 10,616 | 20,599 | 21,087 | ||||||||||
| Impairment and closure | 100 | 14 | 258 | (72 | ) | |||||||||
| General and administrative | 14,953 | 13,237 | 27,295 | 24,046 | ||||||||||
| Total costs and expenses | 231,833 | 220,929 | 461,351 | 444,719 | ||||||||||
| Income from operations | 23,329 | 21,494 | 53,435 | 43,777 | ||||||||||
| Interest expense, net | 704 | 876 | 1,434 | 1,733 | ||||||||||
| Equity income from investments in unconsolidated affiliates | 92 | 64 | 200 | 149 | ||||||||||
| Income before taxes | 22,717 | 20,682 | 52,201 | 42,193 | ||||||||||
| Provision for income taxes | 7,049 | 6,436 | 16,655 | 13,151 | ||||||||||
| Net income including noncontrolling interests | $ | 15,668 | $ | 14,246 | $ | 35,546 | $ | 29,042 | ||||||
| Less: Net income attributable to noncontrolling interests | 632 | 505 | 1,269 | 967 | ||||||||||
| Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ | 15,036 | $ | 13,741 | $ | 34,277 | $ | 28,075 | ||||||
| Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | ||||||||||||||
| Basic | $ | 0.21 | $ | 0.20 | $ | 0.48 | $ | 0.40 | ||||||
| Diluted | $ | 0.21 | $ | 0.19 | $ | 0.47 | $ | 0.40 | ||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 71,471 | 69,909 | 71,076 | 69,666 | ||||||||||
| Diluted | 72,961 | 71,361 | 72,587 | 70,948 | ||||||||||
| Texas Roadhouse, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheet | ||||||||
| (in thousands) | ||||||||
| June 29, 2010 | December 29, 2009 | |||||||
| Cash and cash equivalents | $ | 60,235 | $ | 46,858 | ||||
| Other current assets | 27,763 | 27,458 | ||||||
| Property and equipment, net | 453,365 | 456,281 | ||||||
| Goodwill | 113,465 | 113,465 | ||||||
| Intangible asset, net | 10,656 | 11,194 | ||||||
| Other assets | 7,103 | 6,817 | ||||||
| Total assets | $ | 672,587 | $ | 662,073 | ||||
| Current maturities of long-term debt and obligations under capital leases | 260 | 247 | ||||||
| Other current liabilities | 91,416 | 107,956 | ||||||
| Long-term debt and obligations under capital leases, excluding current maturities | 79,046 | 101,179 | ||||||
| Other liabilities | 36,342 | 29,741 | ||||||
| Texas Roadhouse, Inc. and subsidiaries stockholders’ equity | 462,835 | 420,372 | ||||||
| Noncontrolling interests | 2,688 | 2,578 | ||||||
| Total liabilities and equity | $ | 672,587 | $ | 662,073 | ||||
| Texas Roadhouse, Inc. and Subsidiaries | |||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||
| (in thousands, except per share data) | |||||||||
| (unaudited) | |||||||||
| 26 Weeks Ended | |||||||||
| June 29, 2010 | June 30, 2009 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net income including noncontrolling interests | $ | 35,546 | $ | 29,042 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||||
| Depreciation and amortization | 20,599 | 21,087 | |||||||
| Share-based compensation expense | 3,736 | 3,814 | |||||||
| Other noncash adjustments | 300 | 1,497 | |||||||
| Change in working capital | (11,853 | ) | (8,914 | ) | |||||
| Net cash provided by operating activities | 48,328 | 46,526 | |||||||
| Cash flows from investing activities: | |||||||||
| Capital expenditures – property and equipment | (17,967 | ) | (22,526 | ) | |||||
| Acquisition of franchise restaurants, net of cash acquired | – | 50 | |||||||
| Proceeds from sale of property and equipment, including insurance proceeds | 51 | 120 | |||||||
| Net cash used in investing activities | (17,916 | ) | (22,356 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Repayments of revolving credit facility, net | (22,000 | ) | (6,000 | ) | |||||
| Other financing activities | 4,965 | 1,551 | |||||||
| Net cash used in financing activities | (17,035 | ) | (4,449 | ) | |||||
| Net increase in cash and cash equivalents | 13,377 | 19,721 | |||||||
| Cash and cash equivalents – beginning of year | 46,858 | 5,258 | |||||||
| Cash and cash equivalents – end of year | $ | 60,235 | $ | 24,979 | |||||
| Supplemental Financial and Operating Information | ||||||||||||||||||||||||||
| ($ amounts in thousands) | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| Second Quarter | Change | Year to Date | Change | |||||||||||||||||||||||
| 2010 | 2009 | vs LY | 2010 | 2009 | vs LY | |||||||||||||||||||||
| Restaurant openings | ||||||||||||||||||||||||||
| Company | 1 | 2 | (1 | ) | 4 | 11 | (7 | ) | ||||||||||||||||||
| Franchise | 1 | 1 | 0 | 1 | 1 | 0 | ||||||||||||||||||||
| Total | 2 | 3 | (1 | ) | 5 | 12 | (7 | ) | ||||||||||||||||||
| Restaurant closures | ||||||||||||||||||||||||||
| Company | (1 | ) | 0 | (1 | ) | (1 | ) | 0 | (1 | ) | ||||||||||||||||
| Franchise | 0 | (1 | ) | 1 | 0 | (1 | ) | 1 | ||||||||||||||||||
| Total | (1 | ) | (1 | ) | 0 | (1 | ) | (1 | ) | 0 | ||||||||||||||||
| Restaurants open at the end of the quarter | ||||||||||||||||||||||||||
| Company | 264 | 256 | 8 | |||||||||||||||||||||||
| Franchise | 71 | 69 | 2 | |||||||||||||||||||||||
| Total | 335 | 325 | 10 | |||||||||||||||||||||||
| Company-owned restaurants | ||||||||||||||||||||||||||
| Restaurant sales | $ | 252,835 | $ | 240,301 | 5.2 | % | $ | 510,177 | $ | 484,391 | 5.3 | % | ||||||||||||||
| Store weeks | 3,432 | 3,313 | 3.6 | % | 6,844 | 6,562 | 4.3 | % | ||||||||||||||||||
| Comparable restaurant sales growth (1) | 1.4 | % | (3.7 | ) | % | 0.9 | % | (2.4 | ) | % | ||||||||||||||||
| Average unit volume (2) | $ | 952 | $ | 939 | 1.4 | % | $ | 1,925 | $ | 1,914 | 0.6 | % | ||||||||||||||
| Restaurant operating costs (as a % of restaurant sales) | ||||||||||||||||||||||||||
| Cost of sales | 32.7 | % | 33.4 | % | (73 | ) | bps | 32.4 | % | 33.7 | % | (129 | ) | bps | ||||||||||||
| Labor | 29.5 | % | 29.6 | % | (11 | ) | bps | 29.3 | % | 29.4 | % | (15 | ) | bps | ||||||||||||
| Rent | 2.1 | % | 2.1 | % | 4 | bps | 2.1 | % | 2.0 | % | 4 | bps | ||||||||||||||
| Other operating | 16.9 | % | 16.6 | % | 35 | bps | 16.7 | % | 16.7 | % | 8 | bps | ||||||||||||||
| Total | 81.2 | % | 81.6 | % | (45 | ) | bps | 80.5 | % | 81.8 | % | (132 | ) | bps | ||||||||||||
| Restaurant margins (3) | 18.8 | % | 18.4 | % | 45 | bps | 19.5 | % | 18.2 | % | 132 | bps | ||||||||||||||
| Franchise-owned restaurants | ||||||||||||||||||||||||||
| Franchise royalties and fees | $ | 2,327 | $ | 2,122 | 9.7 | % | $ | 4,609 | $ | 4,105 | 12.3 | % | ||||||||||||||
| Store weeks | 911 | 897 | 1.6 | % | 1,821 | 1,794 | 1.5 | % | ||||||||||||||||||
| Comparable restaurant sales growth (1) | 2.0 | % | (3.5 | ) | % | 1.4 | % | (2.7 | ) | % | ||||||||||||||||
| Average unit volume (2) | $ | 951 | $ | 927 | 2.6 | % | $ | 1,900 | $ | 1,873 | 1.4 | % | ||||||||||||||
| Pre-opening expense | $ | 1,307 | $ | 933 | 40.1 | % | $ | 2,412 | $ | 3,217 | (25.0 | ) | % | |||||||||||||
| Depreciation and amortization | $ | 10,262 | $ | 10,616 | (3.3 | ) | % | $ | 20,599 | $ | 21,087 | (2.3 | ) | % | ||||||||||||
| As a % of revenue | 4.0 | % | 4.4 | % | (36 | ) | bps | 4.0 | % | 4.3 | % | (32 | ) | bps | ||||||||||||
| Impairment and closure | $ | 100 | $ | 14 | NM | $ | 258 | $ | (72 | ) | NM | |||||||||||||||
| As a % of revenue | 0.0 | % | 0.0 | % | 3 | bps | 0.1 | % | (0.0 | ) | % | 6 | bps | |||||||||||||
| General and administrative expenses | $ | 14,953 | $ | 13,237 | 13.0 | % | $ | 27,295 | $ | 24,046 | 13.5 | % | ||||||||||||||
| As a % of revenue | 5.9 | % | 5.5 | % | 40 | bps | 5.3 | % | 4.9 | % | 38 | 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. For comparative purposes, average unit volumes for Q2 2009 and 2009 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). | |
| NM – Not meaningful | ||
| Amounts may not foot due to rounding. | ||