Form 8-K Texas Roadhouse, Inc. For: Nov 03

�

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

�

FORM�8-K

�

CURRENT REPORT

Pursuant to Section�13 or 15(d)�of the Securities Exchange Act of 1934

�

Date of Report (Date of earliest event reported)��� November�3, 2014

�

TEXAS ROADHOUSE,�INC.

(Exact name of registrant as specified in its charter)

�

�

�

Registrant�s telephone number, including area code��� (502) 426-9984

�

N/A

(Former name or former address, if changed since last report.)

�

Check the appropriate box below if the Form�8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

�

o���������������� Written communications pursuant to Rule�425 under the Securities Act (17 CFR 230.425)

�

o���������������� Soliciting material pursuant to Rule�14a-12 under the Exchange Act (17 CFR 240.14a-12)

�

o���������������� Pre-commencement communications pursuant to Rule�14d-2(b)�under the Exchange Act (17 CFR 240.14d-2(b))

�

o���������������� Pre-commencement communications pursuant to Rule�13e-4(c)�under the Exchange Act (17 CFR 240.13e-4(c))

�

�

�

ITEM 2.02.� RESULTS OF OPERATIONS AND FINANCIAL CONDITION

�

On November�3, 2014, Texas Roadhouse,�Inc. (the �Company�) issued a press release announcing its financial results for the quarter ended September�30, 2014.� Attached to this Current Report on Form�8-K as Exhibit�99.1 is a copy of the press release.

�

ITEM 9.01.� FINANCIAL STATEMENTS AND EXHIBITS

�

(d)�������������������������������� EXHIBITS

�

99.1����������������������������������������������� Press Release issued by the company on November�3, 2014.

�

The information in this Current Report on Form�8-K at Item 2.02 and the Exhibit�attached hereto shall not be deemed to be �filed� for the purposes of Section�18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.� Such information will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

�

2

�

SIGNATURE

�

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

�

�

�	TEXAS ROADHOUSE,�INC.
�	�
�	�	�
Date: November�3, 2014	By:	/s/ G. Price Cooper,�IV
�	�	G. Price Cooper,�IV
�	�	Chief Financial Officer

�

3

�

INDEX TO EXHIBITS

�

Exhibit�No.	�	�
�	�	�
99.1	�	Press Release issued by the Company on November�3, 2014.

�

4

Exhibit�99.1

�

Texas Roadhouse,�Inc. Announces Third Quarter 2014 Results

�

LOUISVILLE, KY. (November�3, 2014) � Texas Roadhouse,�Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 week periods ended September�30, 2014.

�

�

�

Third�Quarter

�

Year�to�Date

�

($000�s)

�

2014

�

2013

�

%�Change

�

2014

�

2013

�

%�Change

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Total revenue

�

$

385,218

�

$

334,770

�

15

�

$

1,177,723

�

$

1,046,565

�

13

�

Income from operations

�

28,821

�

25,696

�

12

�

103,406

�

93,661

�

10

�

Net income

�

18,881

�

17,170

�

10

�

68,427

�

63,304

�

8

�

Diluted EPS

�

$

0.27

�

$

0.24

�

12

�

$

0.97

�

$

0.89

�

9

�

�

Results for the third quarter included:

�

������������������ Diluted earnings per share increased 11.9% to $0.27 from $0.24 in the prior year;

������������������ Comparable restaurant sales increased 5.9% at company restaurants and 5.2% at franchise restaurants;

������������������ Three company restaurants were opened;

������������������ Restaurant margin, as a percentage of restaurant sales, decreased 40 basis points to 16.8%, primarily due to approximately 4.5% food cost inflation and higher costs associated with general liability insurance due to the impact of overlapping a $1.3 million credit recorded in the prior year period;

������������������ Income tax rate increased 178 basis points to 31.4%, primarily due to reduced activity related to the exercise of incentive stock options and the expiration of certain federal tax credits at the end of 2013; and

������������������ The Company repurchased 315,000 shares of its common stock for $8.2 million.

�

Results for the year-to-date included:

�

������������������ Diluted earnings per share increased 8.9% to $0.97 from $0.89 in the prior year;

������������������ Comparable restaurant sales increased 3.9% at company restaurants and 4.4% at franchise restaurants;

������������������ 15 company restaurants and one franchise restaurant were opened;

������������������ Restaurant margin, as a percentage of restaurant sales, decreased 21 basis points to 18.1%;

������������������ Costs associated with the Company�s annual managing partner conference were $2.0 million lower compared to the prior year period;

������������������ Income tax rate increased 182 basis points to 30.6%, primarily due to the expiration of certain federal tax credits at the end of 2013; and

������������������ The Company repurchased 1,575,000 shares of its common stock for $40.0 million.

�

Kent Taylor, Chief Executive Officer of Texas Roadhouse,�Inc., commented, �We are pleased to report another quarter of strong top-line growth highlighted by solid traffic growth of 4.4%.� While we were challenged by higher commodity cost inflation, we delivered solid diluted earnings per share growth this quarter.� As we move into the fourth quarter, we are pleased with our sales momentum, and our development is on track.�� Looking ahead to 2015, we are well positioned for continued success with 25 to 30 planned restaurant openings, a strong balance sheet and healthy cash flow with a focus on returning excess capital to our shareholders, and an ongoing commitment to legendary food and legendary service.�

�

�

2014 Outlook

�

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its fourth quarter of fiscal 2014 increased approximately 7.0% compared to the prior year period.

�

Management reiterated the following expectations for 2014:

�

������������������ Positive comparable restaurant sales growth;

������������������ Approximately 25 company restaurant openings; and

������������������ An income tax rate of approximately 30.0% to 31.0% which is higher than the 2013 income tax rate primarily as a result of the expiration of certain federal tax credits at the end of 2013.

�

Management updated the following expectations for 2014:

�

������������������ Approximately 3.0% food cost inflation for the full year; and

������������������ Total capital expenditures of approximately $110 million.

�

2015 Outlook

�

Management provided the following expectations for 2015:

�

������������������ Positive comparable restaurant sales growth;

������������������ 25 to 30 company restaurant openings;

������������������ Low to mid-single digit food cost inflation;

������������������ An income tax rate of approximately 29.0% to 31.0% depending on the reinstatement of certain federal tax credits and timing of such; and

������������������ Total capital expenditures of $110 million to $120 million.

�

Conference Call

�

The Company is hosting a conference call today, November�3, 2014 at 5:00�p.m. Eastern Time to discuss these results.� The dial-in number is (877) 857-6151 or (719) 325-4879 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 2758536 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 440 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; 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�30, 2014

�

September�24, 2013

�

September�30, 2014

�

September�24, 2013

�

�

�

�

�

�

�

�

�

�

�

Revenue:

�

�

�

�

�

�

�

�

�

Restaurant sales

�

$

381,991

�

$

331,746

�

$

1,167,766

�

$

1,037,239

�

Franchise royalties and fees

�

3,227

�

3,024

�

9,957

�

9,326

�

�

�

�

�

�

�

�

�

�

�

Total revenue

�

385,218

�

334,770

�

1,177,723

�

1,046,565

�

�

�

�

�

�

�

�

�

�

�

Costs and expenses:

�

�

�

�

�

�

�

�

�

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

�

�

�

�

�

�

�

�

�

Cost of sales

�

137,658

�

116,570

�

409,552

�

361,334

�

Labor

�

112,521

�

99,003

�

342,375

�

302,387

�

Rent

�

8,380

�

7,181

�

24,550

�

21,390

�

Other operating

�

59,276

�

51,949

�

180,491

�

162,716

�

Pre-opening

�

3,945

�

4,746

�

12,677

�

11,810

�

Depreciation and amortization

�

15,164

�

12,462

�

43,682

�

36,864

�

Impairment and closure

�

(16

)

103

�

10

�

187

�

General and administrative

�

19,469

�

17,060

�

60,980

�

56,216

�

�

�

�

�

�

�

�

�

�

�

Total costs and expenses

�

356,397

�

309,074

�

1,074,317

�

952,904

�

�

�

�

�

�

�

�

�

�

�

Income from operations

�

28,821

�

25,696

�

103,406

�

93,661

�

�

�

�

�

�

�

�

�

�

�

Interest expense, net

�

492

�

525

�

1,564

�

1,687

�

Equity income from investments in unconsolidated affiliates

�

410

�

173

�

975

�

571

�

�

�

�

�

�

�

�

�

�

�

Income before taxes

�

28,739

�

25,344

�

102,817

�

92,545

�

Provision for income taxes

�

9,017

�

7,500

�

31,462

�

26,617

�

�

�

�

�

�

�

�

�

�

�

Net income including noncontrolling interests

�

$

19,722

�

$

17,844

�

$

71,355

�

$

65,928

�

Less: Net income attributable to noncontrolling interests

�

841

�

674

�

2,928

�

2,624

�

Net income attributable to Texas Roadhouse,�Inc. and subsidiaries

�

$

18,881

�

$

17,170

�

$

68,427

�

$

63,304

�

�

�

�

�

�

�

�

�

�

�

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

�

�

�

�

�

�

�

�

�

Basic

�

$

0.27

�

$

0.24

�

$

0.98

�

$

0.91

�

Diluted

�

$

0.27

�

$

0.24

�

$

0.97

�

$

0.89

�

�

�

�

�

�

�

�

�

�

�

Weighted average shares outstanding:

�

�

�

�

�

�

�

�

�

Basic

�

69,544

�

70,361

�

69,793

�

69,914

�

Diluted

�

70,395

�

71,620

�

70,639

�

71,175

�

�

�

Texas Roadhouse,�Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

�

�	�	�		�	(As�Adjusted)�(1)		�
�	�	September�30,�2014		�	December�31,�2013		�
�	�	�		�	�		�
Cash and cash equivalents	�	$	59,307	�	$	94,874	�
Other current assets	�	39,646		�	50,869		�
Property and equipment, net	�	631,552		�	586,212		�
Goodwill	�	117,197		�	117,197		�
Intangible assets, net	�	6,546		�	7,876		�
Other assets	�	22,059		�	20,616		�
�	�	�		�	�		�
Total assets	�	$	876,307	�	$	877,644	�
�	�	�		�	�		�
Current maturities of long-term debt	�	126		�	243		�
Other current liabilities	�	164,795		�	174,937		�
Long-term debt, excluding current maturities	�	50,727		�	50,990		�
Other liabilities	�	57,744		�	57,614		�
Texas Roadhouse,�Inc. and subsidiaries stockholders� equity	�	596,120		�	587,659		�
Noncontrolling interests	�	6,795		�	6,201		�
�	�	�		�	�		�
Total liabilities and equity	�	$	876,307	�	$	877,644	�

�

(1)�������������������������������� December�31, 2013 revised to reflect the impact of adjustments to purchase price accounting related to 2013 acquisitions in accordance with generally accepted accounting principles (�GAAP�).

�

�

Texas Roadhouse,�Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

�

�	�	39�Weeks�Ended					�
�	�	September�30,�2014		�	September�24,�2013		�
�	�	�		�	�		�
Cash flows from operating activities:	�	�		�	�		�
Net income including noncontrolling interests	�	$	71,355	�	$	65,928	�
Adjustments to reconcile net income to net cash provided by operating activities	�	�		�	�		�
Depreciation and amortization	�	43,682		�	36,864		�
Share-based compensation expense	�	10,937		�	10,583		�
Other noncash adjustments	�	(1,392		)	843		�
Change in working capital	�	(8,266		)	(15,534		)
Net cash provided by operating activities	�	116,316		�	98,684		�
�	�	�		�	�		�
Cash flows from investing activities:	�	�		�	�		�
Capital expenditures - property and equipment	�	(89,645		)	(70,911		)
Proceeds from sale of property and equipment, including insurance proceeds	�	1,197		�	(39		)
Net cash used in investing activities	�	(88,448		)	(70,950		)
�	�	�		�	�		�
Cash flows from financing activities:	�	�		�	�		�
Repurchase shares of common stock	�	(39,966		)	�		�
Dividends paid	�	(20,923		)	(29,939		)
Other financing activities	�	(2,546		)	7,803		�
Net cash used in financing activities	�	(63,435		)	(22,136		)
�	�	�		�	�		�
Net (decrease) increase in cash and cash equivalents	�	(35,567		)	5,598		�
Cash and cash equivalents - beginning of year	�	94,874		�	81,746		�
Cash and cash equivalents - end of period	�	$	59,307	�	$	87,344	�

�

�

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

�

�

�

2014

�

2013

�

vs�LY

�

2014

�

2013

�

vs�LY

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Restaurant openings

�

�

�

�

�

�

�

�

�

�

�

�

�

Company - Texas Roadhouse

�

3

�

4

�

(1

)

15

�

13

�

2

�

Company - Other

�

0

�

0

�

0

�

0

�

1

�

(1

)

Franchise - Texas Roadhouse

�

0

�

0

�

0

�

1

�

3

�

(2

)

Total

�

3

�

4

�

(1

)

16

�

17

�

(1

)

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Restaurants open at the end of the quarter

�

�

�

�

�

�

�

�

�

�

�

�

�

Company - Texas Roadhouse

�

360

�

331

�

29

�

�

�

�

�

�

�

Company - Other

�

1

�

3

�

(2

)

�

�

�

�

�

�

Franchise - Texas Roadhouse

�

75

�

75

�

0

�

�

�

�

�

�

�

Total

�

436

�

409

�

27

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Company-owned restaurants

�

�

�

�

�

�

�

�

�

�

�

�

�

Restaurant sales

�

$

381,991

�

$

331,746

�

15.1

%

$

1,167,766

�

$

1,037,239

�

12.6

%

Store weeks

�

4,682

�

4,294

�

9.0

%

13,799

�

12,682

�

8.8

%

Comparable restaurant sales growth (1)

�

5.9

%

2.6

%

�

�

3.9

%

3.7

%

�

�

Texas Roadhouse restaurants only:

�

�

�

�

�

�

�

�

�

�

�

�

�

Comparable restaurant sales growth (1)

�

5.9

%

2.6

%

�

�

3.9

%

3.7

%

�

�

Average unit volume (2)

�

$

1,051

�

$

994

�

5.7

%

$

3,270

�

$

3,167

�

3.2

%

Weekly sales by group:

�

�

�

�

�

�

�

�

�

�

�

�

�

Comparable restaurants (320 units)

�

$

80,995

�

�

�

�

�

�

�

�

�

�

�

Average unit volume restaurants (25 units) (3)

�

$

78,542

�

�

�

�

�

�

�

�

�

�

�

Restaurants less than 6 months old (15 units)

�

$

99,636

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Restaurant operating costs (as a % of restaurant sales)

�

�

�

�

�

�

�

�

�

�

�

�

�

Cost of sales

�

36.0

%

35.1

%

90

bps

35.1

%

34.8

%

24

bps

Labor

�

29.5

%

29.8

%

(39

)bps

29.3

%

29.2

%

17

bps

Rent

�

2.2

%

2.2

%

3

bps

2.1

%

2.1

%

4

bps

Other operating

�

15.5

%

15.7

%

(14

)bps

15.5

%

15.7

%

(23

)bps

Total

�

83.2

%

82.8

%

40

bps

81.9

%

81.7

%

21

bps

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Restaurant margin (4)

�

16.8

%

17.2

%

(40

)bps

18.1

%

18.3

%

(21

)bps

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Restaurant margin ($�in thousands)

�

$

64,156

�

$

57,043

�

12.5

%

$

210,798

�

$

189,410

�

11.3

%

Restaurant margin $/Store week

�

$

13,703

�

$

13,284

�

3.2

%

$

15,276

�

$

14,935

�

2.3

%

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Franchise-owned restaurants

�

�

�

�

�

�

�

�

�

�

�

�

�

Franchise royalties and fees

�

$

3,227

�

$

3,024

�

6.7

%

$

9,957

�

$

9,326

�

6.8

%

Store weeks

�

975

�

975

�

�

%

2,912

�

2,886

�

0.9

%

Comparable restaurant sales growth (1)

�

5.2

%

4.0

%

�

�

4.4

%

4.2

%

�

�

Average unit volume (2)

�

$

1,128

�

$

1,058

�

6.6

%

$

3,473

�

$

3,273

�

6.1

%

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Pre-opening expense

�

$

3,945

�

$

4,746

�

(16.9

)%

$

12,677

�

$

11,810

�

7.3

%

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Depreciation and amortization

�

$

15,164

�

$

12,462

�

21.7

%

$

43,682

�

$

36,864

�

18.5

%

As a % of revenue

�

3.9

%

3.7

%

21

bps

3.7

%

3.5

%

19

bps

�

�

�

�

�

�

�

�

�

�

�

�

�

�

General and administrative expenses

�

$

19,469

�

$

17,060

�

14.1

%

$

60,980

�

$

56,216

�

8.5

%

As a % of revenue

�

5.1

%

5.1

%

(4

)bps

5.2

%

5.4

%

(19

)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 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.

�