Cheesecake Factory (CAKE) Announces Proposed Offerings of Convertible Senior Notes and Common Stock

The Cheesecake Factory Incorporated (NASDAQ: CAKE) (the “Company”) today announced its intention to offer, subject to market and other conditions, $300,000,000 aggregate principal amount of convertible senior notes due 2026 (the “notes”) and $175,000,000 of common stock in separate public offerings registered under the Securities Act of 1933, as amended. The Company also expects to grant the underwriters of the note offering a 30-day option to purchase up to an additional $45,000,000 principal amount of notes solely to cover over-allotments and expects to grant the underwriters of the common stock offering a 30-day option to purchase up to an additional $26,250,000 of common stock solely to cover over-allotments. The completion of the note offering will not be contingent on the completion of the common stock offering, and the completion of the common stock offering will not be contingent on the completion of the note offering.

The notes will be senior, unsecured obligations of the Company, will accrue interest payable semi-annually in arrears and will mature on June 15, 2026, unless earlier repurchased, redeemed or converted. The Company will settle the conversion value in cash up to the principal amount being converted and any excess of the conversion value over the principal amount in cash, shares of common stock or a combination thereof, at the Company’s election. The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the note offering.

The Company intends to use the net proceeds from the offerings to fund the cash consideration of approximately $457.4 million payable in the preferred stock repurchase and conversion described below to simplify the capital structure. The Company intends to use the remaining net proceeds, if any, for general corporate purposes, including the repayment of debt under the Company’s revolving credit facility.

The Company has entered into agreements with the holders of its outstanding Series A convertible preferred stock pursuant to which the Company will repurchase 150,000 shares of the outstanding Series A convertible preferred stock for approximately $447.0 million in cash and the holder of the remaining outstanding Series A convertible preferred stock will convert the remaining 50,000 shares of the outstanding Series A convertible preferred stock into shares of the Company’s common stock and receive approximately $10.4 million in cash in connection with such conversion. The completion of the preferred stock repurchase and conversion will be subject to customary closing conditions and will be contingent on the completion of the proposed offerings.

J.P. Morgan, BNP PARIBAS, BofA Securities and Wells Fargo Securities are acting as joint book-running managers for the offerings.

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