LOUISVILLE, Ky., July 31, 2017 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (Nasdaq:TXRH) today announced financial results for the 13 and 26 week periods ended June 27, 2017.
| Second Quarter | Year to Date | |||||||||||||
| ($000's) | 2017 | 2016 | % Change | 2017 | 2016 | % Change | ||||||||
| Total revenue | $ | 566,262 | $ | 508,808 | 11 | % | $ | 1,133,948 | $ | 1,024,367 | 11 | % | ||
| Income from operations | 54,214 | 49,782 | 9 | % | 103,236 | 102,593 | 1 | % | ||||||
| Net income | 37,581 | 33,605 | 12 | % | 71,894 | 69,198 | 4 | % | ||||||
| Diluted EPS | $ | 0.53 | $ | 0.47 | 11 | % | $ | 1.01 | $ | 0.98 | 3 | % | ||
Results for the second quarter included the following highlights:
- Comparable restaurant sales increased 4.0% at company restaurants and 3.6% at domestic franchise restaurants;
- Restaurant margin, as a percentage of restaurant sales, decreased 28 basis points to 18.9%, primarily driven by wage rate inflation, partially offset by the benefit of lower food costs;
- Diluted earnings per share increased 11.0% to $0.53 from $0.47 in the prior year; and
- Seven company-owned restaurants were opened, including two Bubba's 33 restaurants.
Results for the year-to-date period included the following highlights:
- Comparable restaurant sales increased 3.6% at company restaurants and 3.8% at domestic franchise restaurants;
- Restaurant margin, as a percentage of restaurant sales, decreased 25 basis points to 19.4%, primarily driven by wage rate inflation, partially offset by the benefit of lower food costs;
- A pre-tax charge of $14.9 million ($9.2 million after-tax), or $0.13 per diluted share, was recorded in the first quarter of 2017, related to the settlement of a previously disclosed legal matter. The impact of the legal charge was partially offset by a pre-tax charge recorded in the first quarter of 2016 of $5.5 million ($3.4 million after-tax) related to a separate legal matter which had an impact of $0.05 on diluted earnings per share;
- Diluted earnings per share increased 3.1% to $1.01 from $0.98 in the prior year; and
- 13 company-owned restaurants were opened, including two Bubba’s 33 restaurants.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are pleased with our results for the second quarter highlighted by double-digit growth in both revenue and diluted earnings per share. In addition, our comparable restaurant sales growth, driven by traffic gains, continues to be solid with an increase of 4.6% for the first four weeks of the third quarter. We are on track to open 27 to 29 company restaurants this year. Looking ahead, we remain focused on our long-term growth potential as we continue to fill our new restaurant pipeline for next year and beyond. Finally, the strength of our 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."
2017 Outlook
Comparable restaurant sales at company restaurants for the first four weeks of our third quarter of fiscal 2017 increased approximately 4.6% compared to the prior year period.
Management updated the following expectations for 2017:
- 27 to 29 company restaurant openings, including approximately four Bubba’s 33 restaurants compared to previous guidance of approximately 30 company restaurants, including approximately six Bubba’s 33 restaurants; and,
- An income tax rate of approximately 28.0% compared to previous guidance of 29.0% to 30.0%.
Management reiterated the following expectations for 2017:
- Positive comparable restaurant sales growth;
- Food cost deflation of approximately 1.0% to 2.0%;
- Mid-single digit labor inflation; and,
- Total capital expenditures of approximately $170.0 million, excluding any cash used for franchise acquisitions.
Conference Call
The Company is hosting a conference call today, July 31, 2017 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (888) 334-3032 or (719) 457-2619 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (844) 512-2921 or (412) 317-6671 for international calls, and use 3626432 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 535 restaurants system-wide in 49 states and six 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; food safety and food-borne illness concerns; 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 27, 2017 | June 28, 2016 | June 27, 2017 | June 28, 2016 | ||||||||||||||||
| Revenue: | |||||||||||||||||||
| Restaurant sales | $ | 562,160 | $ | 504,630 | $ | 1,125,480 | $ | 1,015,914 | |||||||||||
| Franchise royalties and fees | 4,102 | 4,178 | 8,468 | 8,453 | |||||||||||||||
| Total revenue | 566,262 | 508,808 | 1,133,948 | 1,024,367 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||
| Restaurant operating costs (excluding depreciation and amortization shown separately below): | |||||||||||||||||||
| Cost of sales | 185,171 | 171,551 | 369,364 | 344,679 | |||||||||||||||
| Labor | 174,585 | 150,014 | 344,932 | 297,560 | |||||||||||||||
| Rent | 11,112 | 10,184 | 21,981 | 20,211 | |||||||||||||||
| Other operating | 84,837 | 75,887 | 170,497 | 153,499 | |||||||||||||||
| Pre-opening | 5,014 | 4,411 | 9,754 | 9,236 | |||||||||||||||
| Depreciation and amortization | 23,106 | 20,238 | 45,702 | 39,777 | |||||||||||||||
| Impairment and closure | - | 30 | 11 | 41 | |||||||||||||||
| General and administrative | 28,223 | 26,711 | 68,471 | 56,771 | |||||||||||||||
| Total costs and expenses | 512,048 | 459,026 | 1,030,712 | 921,774 | |||||||||||||||
| Income from operations | 54,214 | 49,782 | 103,236 | 102,593 | |||||||||||||||
| Interest expense, net | 379 | 309 | 711 | 614 | |||||||||||||||
| Equity income from investments in | |||||||||||||||||||
| unconsolidated affiliates | (470 | ) | (475 | ) | (790 | ) | (827 | ) | |||||||||||
| Income before taxes | 54,305 | 49,948 | 103,315 | 102,806 | |||||||||||||||
| Provision for income taxes | 15,126 | 15,087 | 28,113 | 30,944 | |||||||||||||||
| Net income including noncontrolling interests | $ | 39,179 | $ | 34,861 | $ | 75,202 | $ | 71,862 | |||||||||||
| Less: Net income attributable to noncontrolling interests | 1,598 | 1,256 | 3,308 | 2,664 | |||||||||||||||
| Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ | 37,581 | $ | 33,605 | $ | 71,894 | $ | 69,198 | |||||||||||
| Net income per common share attributable to Texas Roadhouse, Inc. | |||||||||||||||||||
| and subsidiaries: | |||||||||||||||||||
| Basic | $ | 0.53 | $ | 0.48 | $ | 1.01 | $ | 0.98 | |||||||||||
| Diluted | $ | 0.53 | $ | 0.47 | $ | 1.01 | $ | 0.98 | |||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||
| Basic | 70,973 | 70,368 | 70,876 | 70,269 | |||||||||||||||
| Diluted | 71,437 | 70,876 | 71,398 | 70,840 | |||||||||||||||
| Cash dividends declared per share | $ | 0.21 | $ | 0.19 | $ | 0.42 | $ | 0.38 | |||||||||||
| Texas Roadhouse, Inc. and Subsidiaries | ||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||
| (in thousands) | ||||||||||||
| (unaudited) | ||||||||||||
| June 27, 2017 | December 27, 2016 | |||||||||||
| Cash and cash equivalents | $ | 116,508 | $ | 112,944 | ||||||||
| Other current assets | 55,904 | 87,315 | ||||||||||
| Property and equipment, net | 868,668 | 830,054 | ||||||||||
| Goodwill | 121,040 | 116,571 | ||||||||||
| Intangible assets, net | 3,161 | 3,622 | ||||||||||
| Other assets | 34,000 | 29,465 | ||||||||||
| Total assets | $ | 1,199,281 | $ | 1,179,971 | ||||||||
| Current maturities of long-term debt and obligation under capital lease | 176 | 167 | ||||||||||
| Other current liabilities | 246,032 | 279,360 | ||||||||||
| Long-term debt and obligation under capital lease, excluding current maturities | 52,291 | 52,381 | ||||||||||
| Other liabilities | 91,361 | 89,821 | ||||||||||
| Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 797,388 | 750,226 | ||||||||||
| Noncontrolling interests | 12,033 | 8,016 | ||||||||||
| Total liabilities and equity | $ | 1,199,281 | $ | 1,179,971 | ||||||||
| Texas Roadhouse, Inc. and Subsidiaries | ||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||
| (in thousands) | ||||||||||||
| (unaudited) | ||||||||||||
| 26 Weeks Ended | ||||||||||||
| June 27, 2017 | June 28, 2016 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income including noncontrolling interests | $ | 75,202 | $ | 71,862 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
| Depreciation and amortization | 45,702 | 39,777 | ||||||||||
| Share-based compensation expense | 12,365 | 11,703 | ||||||||||
| Other noncash adjustments | (1,842 | ) | (493 | ) | ||||||||
| Change in working capital | (3,119 | ) | (8,781 | ) | ||||||||
| Net cash provided by operating activities | 128,308 | 114,068 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Capital expenditures - property and equipment | (73,637 | ) | (69,159 | ) | ||||||||
| Acquisition of franchise restaurants, net of cash acquired | (16,528 | ) | - | |||||||||
| Net cash used in investing activities | (90,165 | ) | (69,159 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from revolving credit facility, net | - | 25,000 | ||||||||||
| Repurchase shares of common stock | - | (4,110 | ) | |||||||||
| Dividends paid | (28,308 | ) | (25,277 | ) | ||||||||
| Other financing activities | (6,271 | ) | (4,551 | ) | ||||||||
| Net cash used in financing activities | (34,579 | ) | (8,938 | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents | 3,564 | 35,971 | ||||||||||
| Cash and cash equivalents - beginning of period | 112,944 | 59,334 | ||||||||||
| Cash and cash equivalents - end of period | $ | 116,508 | $ | 95,305 | ||||||||
| 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 | ||||||||||||||||||||
| 2017 | 2016 | vs LY | 2017 | 2016 | vs LY | ||||||||||||||||||
| Restaurant openings | |||||||||||||||||||||||
| Company - Texas Roadhouse | 5 | 6 | (1 | ) | 11 | 11 | 0 | ||||||||||||||||
| Company - Bubba's 33 | 2 | 1 | 1 | 2 | 3 | (1 | ) | ||||||||||||||||
| Company - Other | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||
| Franchise - Texas Roadhouse - U.S. | 0 | 0 | 0 | 1 | 0 | 1 | |||||||||||||||||
| Franchise - Texas Roadhouse - International | 0 | 1 | (1 | ) | 1 | 2 | (1 | ) | |||||||||||||||
| Total | 7 | 8 | (1 | ) | 15 | 16 | (1 | ) | |||||||||||||||
| Restaurant acquisitions/dispositions | |||||||||||||||||||||||
| Company - Texas Roadhouse | 0 | 0 | 0 | 4 | 0 | 4 | |||||||||||||||||
| Company - Bubba's 33 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||
| Company - Other | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||
| Franchise - Texas Roadhouse | 0 | 0 | 0 | (4 | ) | 0 | (4 | ) | |||||||||||||||
| Total | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||
| Restaurants open at the end of the quarter | |||||||||||||||||||||||
| Company - Texas Roadhouse | 428 | 403 | 25 | ||||||||||||||||||||
| Company - Bubba's 33 | 18 | 10 | 8 | ||||||||||||||||||||
| Company - Other | 2 | 2 | 0 | ||||||||||||||||||||
| Franchise - Texas Roadhouse - U.S. | 70 | 72 | (2 | ) | |||||||||||||||||||
| Franchise - Texas Roadhouse - International | 14 | 12 | 2 | ||||||||||||||||||||
| Total | 532 | 499 | 33 | ||||||||||||||||||||
| Company-owned restaurants | |||||||||||||||||||||||
| Restaurant sales | $ | 562,160 | $ | 504,630 | 11.4 | % | $ | 1,125,480 | $ | 1,015,914 | 10.8 | % | |||||||||||
| Store weeks | 5,775 | 5,350 | 7.9 | % | 11,456 | 10,612 | 8.0 | % | |||||||||||||||
| Comparable restaurant sales growth (1) | 4.0 | % | 4.5 | % | 3.6 | % | 4.5 | % | |||||||||||||||
| Texas Roadhouse restaurants only: | |||||||||||||||||||||||
| Comparable restaurant sales growth (1) | 4.1 | % | 4.5 | % | 3.7 | % | 4.5 | % | |||||||||||||||
| Average unit volume (2) | $ | 1,274 | $ | 1,233 | 3.3 | % | $ | 2,575 | $ | 2,506 | 2.7 | % | |||||||||||
| Weekly sales by group: | |||||||||||||||||||||||
| Comparable restaurants (389 units) | $ | 98,689 | |||||||||||||||||||||
| Average unit volume restaurants (23 units) (3) | $ | 85,958 | |||||||||||||||||||||
| Restaurants less than 6 months old (16 units) | $ | 105,972 | |||||||||||||||||||||
| Restaurant operating costs (as a % of restaurant sales) | |||||||||||||||||||||||
| Cost of sales | 32.9 | % | 34.0 | % | (106 | ) | bps | 32.8 | % | 33.9 | % | (111 | ) | bps | |||||||||
| Labor | 31.1 | % | 29.7 | % | 133 | bps | 30.6 | % | 29.3 | % | 136 | bps | |||||||||||
| Rent | 2.0 | % | 2.0 | % | (4 | ) | bps | 2.0 | % | 2.0 | % | (4 | ) | bps | |||||||||
| Other operating | 15.1 | % | 15.0 | % | 5 | bps | 15.1 | % | 15.1 | % | 4 | bps | |||||||||||
| Total | 81.1 | % | 80.8 | % | 28 | bps | 80.6 | % | 80.3 | % | 25 | bps | |||||||||||
| Restaurant margin (4) | 18.9 | % | 19.2 | % | (28 | ) | bps | 19.4 | % | 19.7 | % | (25 | ) | bps | |||||||||
| Restaurant margin ($ in thousands) (4) | $ | 106,455 | $ | 96,994 | 9.8 | % | $ | 218,706 | $ | 199,965 | 9.4 | % | |||||||||||
| Restaurant margin $ (4)/Store week | $ | 18,434 | $ | 18,130 | 1.7 | % | $ | 19,091 | $ | 18,843 | 1.3 | % | |||||||||||
| Franchise-owned restaurants | |||||||||||||||||||||||
| Franchise royalties and fees | $ | 4,102 | $ | 4,178 | (1.8 | ) | % | $ | 8,468 | $ | 8,453 | 0.2 | % | ||||||||||
| Store weeks | 1,092 | 1,088 | 0.4 | % | 2,172 | 2,157 | 0.7 | % | |||||||||||||||
| Comparable restaurant sales growth (1) | 2.9 | % | 2.6 | % | 3.0 | % | 2.8 | % | |||||||||||||||
| U.S. franchise restaurants only: | |||||||||||||||||||||||
| Comparable restaurant sales growth (1) | 3.6 | % | 4.3 | % | 3.8 | % | 4.2 | % | |||||||||||||||
| Average unit volume (2) | $ | 1,321 | $ | 1,265 | 4.4 | % | $ | 2,644 | $ | 2,552 | 3.6 | % | |||||||||||
| Pre-opening expense | $ | 5,014 | $ | 4,411 | 13.7 | % | $ | 9,754 | $ | 9,236 | 5.6 | % | |||||||||||
| Depreciation and amortization | $ | 23,106 | $ | 20,238 | 14.2 | % | $ | 45,702 | $ | 39,777 | 14.9 | % | |||||||||||
| As a % of revenue | 4.1 | % | 4.0 | % | 10 | bps | 4.0 | % | 3.9 | % | 15 | bps | |||||||||||
| General and administrative expenses | $ | 28,223 | $ | 26,711 | 5.7 | % | $ | 68,471 | $ | 56,771 | 20.6 | % | |||||||||||
| As a % of revenue | 5.0 | % | 5.2 | % | (27 | ) | bps | 6.0 | % | 5.5 | % | 50 | 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 (in dollars and as a percentage of restaurant sales) represents restaurant sales less restaurant operating costs, including cost of sales, labor, rent and other operating costs. Depreciation and amortization expense, substantially all of which relates to restaurant-level assets, is excluded from restaurant operating costs. 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. | |||||||||||||||||||||||