Texas Roadhouse, Inc. Announces Second Quarter 2015 Results
LOUISVILLE, Ky.--(BUSINESS WIRE)--
Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 30, 2015.
| Second Quarter | Year to Date | ||||||||||||||||||||||
| ($000's) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||||
| Total revenue | $ | 454,698 | $ | 395,363 | 15 | $ | 914,928 | $ | 792,505 | 15 | |||||||||||||
| Income from operations | 31,696 | 34,401 | (8 | ) | 80,296 | 74,585 | 8 | ||||||||||||||||
| Net income | 21,138 | 23,081 | (8 | ) | 53,430 | 49,546 | 8 | ||||||||||||||||
| Diluted EPS | $ | 0.30 | $ | 0.33 | (9 | ) | $ | 0.76 | $ | 0.70 | 8 | ||||||||||||
Results for the second quarter included the following highlights:
- Comparable restaurant sales increased 8.2% at company restaurants and 6.9% at franchise restaurants;
- Restaurant margin, as a percentage of restaurant sales, decreased 193 basis points to 16.2%. Food cost inflation of approximately 9.4%, mostly driven by beef, more than offset the impact of higher average unit volume;
- Diluted earnings per share decreased 8.5% to $0.30 from $0.33 in the prior year;
- Nine company–owned restaurants were opened, including two Bubba's 33 restaurants; and,
- The Company repurchased 88,089 shares of its common stock for $3.1 million.
Results for year-to-date included the following highlights:
- Comparable restaurant sales increased 8.5% at company restaurants and 7.5% at franchise restaurants;
- Restaurant margin, as a percentage of restaurant sales, decreased 106 basis points to 17.6%. Food cost inflation of approximately 7.4%, mostly driven by beef, more than offset the impact of higher average unit volume;
- Diluted earnings per share increased 8.2% to $0.76 from $0.70 in the prior year;
- 12 company–owned restaurants were opened, including three Bubba's 33 restaurants; and,
- The Company repurchased 88,089 shares of its common stock for $3.1 million.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are pleased to report strong sales momentum through the second quarter, as we generated double digit revenue gains driven by increasing guest counts and strong operating week growth. In spite of this solid top-line performance, commodity inflation of 9.4% resulted in earnings per share that were lower than the prior year period as it more than offset modest price increases taken in late 2014."
Taylor continued, "On the development front, our new restaurants continue to open with strong sales and we now expect to open approximately 30 company-owned restaurants in 2015. We remain focused on providing legendary food and legendary service, as well as a great value proposition to each and every guest, and as a result, we believe we are well-positioned for growth over the long-term."
2015 Outlook
The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its third quarter of fiscal 2015 increased approximately 7.6% compared to the prior year period.
Management updated the following expectations for 2015:
- Mid-single digit comparable restaurant sales growth;
- Approximately 30 company restaurant openings, including as many as five Bubba's 33 restaurants;
- Food cost inflation of 4.0% to 4.5% which implies 1.0% to 2.0% inflation for the second half of the year; and,
- Total capital expenditures of $145 million to $155 million.
Management reiterated the following expectation for 2015:
- An income tax rate of approximately 30.0% to 31.0% depending on the reinstatement of certain federal tax credits.
Conference Call
The Company is hosting a conference call today, August 3, 2015 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (888) 438-5449 or (719) 325-2443 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 5777050 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 465 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; breaches of security; 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.
| Texas Roadhouse, Inc. and Subsidiaries | ||||||||||||||||
| Condensed Consolidated Statements of Income | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| 13 Weeks Ended | 26 Weeks Ended | |||||||||||||||
| June 30, 2015 | July 1, 2014 | June 30, 2015 | July 1, 2014 | |||||||||||||
| Revenue: | ||||||||||||||||
| Restaurant sales | $ | 450,692 | $ | 391,819 | $ | 906,985 | $ | 785,775 | ||||||||
| Franchise royalties and fees | 4,006 | 3,544 | 7,943 | 6,730 | ||||||||||||
| Total revenue | 454,698 | 395,363 | 914,928 | 792,505 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||||||||||||||||
| Cost of sales | 168,077 | 137,082 | 328,057 | 271,894 | ||||||||||||
| Labor | 132,084 | 115,182 | 263,488 | 229,854 | ||||||||||||
| Rent | 9,138 | 8,128 | 18,117 | 16,170 | ||||||||||||
| Other operating | 68,358 | 60,362 | 137,675 | 121,215 | ||||||||||||
| Pre-opening | 4,909 | 4,455 | 8,727 | 8,732 | ||||||||||||
| Depreciation and amortization | 16,816 | 14,433 | 33,151 | 28,518 | ||||||||||||
| Impairment and closure | - | 9 | - | 26 | ||||||||||||
| General and administrative | 23,620 | 21,311 | 45,417 | 41,511 | ||||||||||||
| Total costs and expenses | 423,002 | 360,962 | 834,632 | 717,920 | ||||||||||||
| Income from operations | 31,696 | 34,401 | 80,296 | 74,585 | ||||||||||||
| Interest expense, net | 495 | 514 | 1,010 | 1,072 | ||||||||||||
|
Equity income from investments in unconsolidated affiliates |
467 | 353 | 839 | 565 | ||||||||||||
| Income before taxes | 31,668 | 34,240 | 80,125 | 74,078 | ||||||||||||
| Provision for income taxes | 9,402 | 10,215 | 24,278 | 22,445 | ||||||||||||
| Net income including noncontrolling interests | $ | 22,266 | $ | 24,025 | $ | 55,847 | $ | 51,633 | ||||||||
| Less: Net income attributable to noncontrolling interests | 1,128 | 944 | 2,417 | 2,087 | ||||||||||||
| Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ | 21,138 | $ | 23,081 | $ | 53,430 | $ | 49,546 | ||||||||
|
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: |
||||||||||||||||
| Basic | $ | 0.30 | $ | 0.33 | $ | 0.76 | $ | 0.71 | ||||||||
| Diluted | $ | 0.30 | $ | 0.33 | $ | 0.76 | $ | 0.70 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 70,026 | 69,705 | 69,933 | 69,918 | ||||||||||||
| Diluted | 70,648 | 70,577 | 70,588 | 70,822 | ||||||||||||
| Texas Roadhouse, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| June 30, 2015 | December 30, 2014 | |||||||
| Cash and cash equivalents | $ | 70,965 | $ | 86,122 | ||||
| Other current assets | 57,953 | 61,604 | ||||||
| Property and equipment, net | 689,204 | 649,637 | ||||||
| Goodwill | 116,571 | 116,571 | ||||||
| Intangible assets, net | 5,515 | 6,203 | ||||||
| Other assets | 25,416 | 23,005 | ||||||
| Total assets | $ | 965,624 | $ | 943,142 | ||||
| Current maturities of long-term debt | 136 | 129 | ||||||
| Other current liabilities | 201,598 | 215,842 | ||||||
| Long-term debt, excluding current maturities | 50,623 | 50,693 | ||||||
| Other liabilities | 61,437 | 61,522 | ||||||
| Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 644,644 | 607,892 | ||||||
| Noncontrolling interests | 7,186 | 7,064 | ||||||
| Total liabilities and equity | $ | 965,624 | $ | 943,142 | ||||
| Texas Roadhouse, Inc. and Subsidiaries | ||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||
| (in thousands) | ||||||||||
| (unaudited) | ||||||||||
| 26 Weeks Ended | ||||||||||
| June 30, 2015 | July 1, 2014 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income including noncontrolling interests | $ | 55,847 | $ | 51,633 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||
| Depreciation and amortization | 33,151 | 28,518 | ||||||||
| Share-based compensation expense | 10,215 | 7,399 | ||||||||
| Other noncash adjustments | (2,992 | ) | (1,044 | ) | ||||||
| Change in working capital | (1,398 | ) | (4,769 | ) | ||||||
| Net cash provided by operating activities | 94,823 | 81,737 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Capital expenditures - property and equipment | (70,933 | ) | (53,971 | ) | ||||||
| Proceeds from sale of property and equipment, including insurance proceeds | 9 | 1,193 | ||||||||
| Net cash used in investing activities | (70,924 | ) | (52,778 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Repurchase shares of common stock | (3,138 | ) | (31,760 | ) | ||||||
| Dividends paid | (34,247 | ) | (10,473 | ) | ||||||
| Other financing activities | (1,671 | ) | (4,139 | ) | ||||||
| Net cash used in financing activities | (39,056 | ) | (46,372 | ) | ||||||
| Net decrease in cash and cash equivalents | (15,157 | ) | (17,413 | ) | ||||||
| Cash and cash equivalents - beginning of period | 86,122 | 94,874 | ||||||||
| Cash and cash equivalents - end of period | $ | 70,965 | $ | 77,461 | ||||||
| Texas Roadhouse, Inc. and Subsidiaries | ||||||||||||||||||||||||||||||
| Supplemental Financial and Operating Information | ||||||||||||||||||||||||||||||
| ($ amounts in thousands, except weekly sales by group) | ||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||
| Second Quarter | Change | Year to Date | Change | |||||||||||||||||||||||||||
| 2015 | 2014 | vs LY | 2015 | 2014 | vs LY | |||||||||||||||||||||||||
| Restaurant openings | ||||||||||||||||||||||||||||||
| Company - Texas Roadhouse | 6 | 6 | 0 | 8 | 12 | (4 | ) | |||||||||||||||||||||||
| Company - Bubba's 33 | 2 | 0 | 2 | 3 | 0 | 3 | ||||||||||||||||||||||||
| Company - Other | 1 | 0 | 1 | 1 | 0 | 1 | ||||||||||||||||||||||||
| Franchise - Texas Roadhouse | 1 | 0 | 1 | 1 | 1 | 0 | ||||||||||||||||||||||||
| Total | 10 | 6 | 4 | 13 | 13 | 0 | ||||||||||||||||||||||||
| Restaurants open at the end of the quarter | ||||||||||||||||||||||||||||||
| Company - Texas Roadhouse | 376 | 357 | 19 | |||||||||||||||||||||||||||
| Company - Bubba's 33 | 6 | 1 | 5 | |||||||||||||||||||||||||||
| Company - Other | 2 | 0 | 2 | |||||||||||||||||||||||||||
| Franchise - Texas Roadhouse | 80 | 75 | 5 | |||||||||||||||||||||||||||
| Total | 464 | 433 | 31 | |||||||||||||||||||||||||||
| Company-owned restaurants | ||||||||||||||||||||||||||||||
| Restaurant sales | $ | 450,692 | $ | 391,819 | 15.0 | % | $ | 906,985 | $ | 785,775 | 15.4 | % | ||||||||||||||||||
| Store weeks | 4,934 | 4,593 | 7.4 | % | 9,790 | 9,117 | 7.4 | % | ||||||||||||||||||||||
| Comparable restaurant sales growth (1) | 8.2 | % | 2.9 | % | 8.5 | % | 2.9 | % | ||||||||||||||||||||||
| Texas Roadhouse restaurants only: | ||||||||||||||||||||||||||||||
| Comparable restaurant sales growth (1) | 8.2 | % | 2.9 | % | 8.5 | % | 2.9 | % | ||||||||||||||||||||||
| Average unit volume (2) | $ | 1,188 | $ | 1,098 | 8.2 | % | $ | 2,409 | $ | 2,218 | 8.6 | % | ||||||||||||||||||
| Weekly sales by group: | ||||||||||||||||||||||||||||||
| Comparable restaurants (334 units) | $ | 91,346 | ||||||||||||||||||||||||||||
| Average unit volume restaurants (27 units) (3) | $ | 91,468 | ||||||||||||||||||||||||||||
| Restaurants less than 6 months old (15 units) | $ | 95,979 | ||||||||||||||||||||||||||||
| Restaurant operating costs (as a % of restaurant sales) | ||||||||||||||||||||||||||||||
| Cost of sales | 37.3 | % | 35.0 | % | 231 |
bps |
36.2 | % | 34.6 | % | 157 |
bps |
||||||||||||||||||
| Labor | 29.3 | % | 29.4 | % | (9 | ) |
bps |
29.1 | % | 29.3 | % | (20 | ) |
bps |
||||||||||||||||
| Rent | 2.0 | % | 2.1 | % | (5 | ) |
bps |
2.0 | % | 2.1 | % | (6 | ) |
bps |
||||||||||||||||
| Other operating | 15.2 | % | 15.4 | % | (24 | ) |
bps |
15.2 | % | 15.4 | % | (25 | ) |
bps |
||||||||||||||||
| Total | 83.8 | % | 81.9 | % | 193 |
bps |
82.4 | % | 81.3 | % | 106 |
bps |
||||||||||||||||||
| Restaurant margin (4) | 16.2 | % | 18.1 | % | (193 | ) |
bps |
17.6 | % | 18.7 | % | (106 | ) |
bps |
||||||||||||||||
| Restaurant margin ($ in thousands) | $ | 73,035 | $ | 71,065 | 2.8 | % | $ | 159,648 | $ | 146,642 | 8.9 | % | ||||||||||||||||||
| Restaurant margin $/Store week | $ | 14,804 | $ | 15,472 | (4.3 | ) | % | $ | 16,307 | $ | 16,084 | 1.4 | % | |||||||||||||||||
| Franchise-owned restaurants | ||||||||||||||||||||||||||||||
| Franchise royalties and fees | $ | 4,006 | $ | 3,544 | 13.0 | % | $ | 7,943 | $ | 6,730 | 18.0 | % | ||||||||||||||||||
| Store weeks | 1,032 | 975 | 5.8 | % | 2,059 | 1,937 | 6.3 | % | ||||||||||||||||||||||
| Comparable restaurant sales growth (1) | 6.9 | % | 3.5 | % | 7.5 | % | 3.6 | % | ||||||||||||||||||||||
| Average unit volume (2) | $ | 1,274 | $ | 1,174 | 8.5 | % | $ | 2,580 | $ | 2,364 | 9.1 | % | ||||||||||||||||||
| Pre-opening expense | $ | 4,909 | $ | 4,455 | 10.2 | % | $ | 8,727 | $ | 8,732 | (0.1 | ) | % | |||||||||||||||||
| Depreciation and amortization | $ | 16,816 | $ | 14,433 | 16.5 | % | $ | 33,151 | $ | 28,518 | 16.2 | % | ||||||||||||||||||
| As a % of revenue | 3.7 | % | 3.7 | % | 5 |
bps |
3.6 | % | 3.6 | % | 2 |
bps |
||||||||||||||||||
| General and administrative expenses | $ | 23,620 | $ | 21,311 | 10.8 | % | $ | 45,417 | $ | 41,511 | 9.4 | % | ||||||||||||||||||
| As a % of revenue | 5.2 | % | 5.4 | % | (20 | ) |
bps |
5.0 | % | 5.2 | % | (27 | ) |
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. | ||||||||||||||||||||||||||||||
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Texas Roadhouse, Inc.
Investor Relations:
Tonya Robinson,
502-515-7269
or
Media:
Travis Doster, 502-638-5457
Source: Texas Roadhouse, Inc.