Texas Roadhouse, Inc. Announces First Quarter 2008 Results

LOUISVILLE, Ky.--(BUSINESS WIRE)--Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 week period ended March 25, 2008.


First Quarter
($000's) 2008 2007 % Change
--------- -------- -------------

Total revenue 211,213 178,337 18
Income from operations 20,700 19,700 5
Net income 12,913 12,296 5
Diluted EPS $0.17 $0.16 5


Highlights for the quarter:

-- Comparable restaurant sales decreased 1.2% at company
restaurants and 2.8% at franchise restaurants;

-- Six company restaurants opened, while one company restaurant
was closed;

-- Restaurant operating costs, as a percentage of restaurant
sales, increased 97 basis points primarily as a result of
higher food and labor costs;

-- The Company repurchased 529,900 shares of its Class A common
stock for a total purchase price of $4.9 million. As of the
end of the first quarter, $20.1 million worth of Class A
common stock remains authorized for repurchase; and

-- Diluted earnings per share, which included a negative $0.006
per share impact relating to costs associated with the closing
of one under-performing restaurant, increased 5% to $0.17 from
$0.16 in the prior year period.


G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, "We are pleased with our first quarter results, which were in-line with our plan. Our operators have responded very well to the challenges we face and continue doing the right things for the long-term success of the business. While we have experienced some modest easing of cost pressures over the past few months, inflation and consumer spending remain uncertain. That said, we remain focused on delivering a legendary dining experience to each and every guest and realize that this basic fundamental is the key to success in any environment. As we look to the remainder of 2008, we believe we are on track to deliver 5-15% diluted earnings per share growth."

Franchise Acquisitions

As previously announced, effective as of the first day of the Company's second quarter of fiscal 2008, the Company acquired three franchise restaurants. The aggregate purchase price for the restaurants, which included two in Missouri and one in Kentucky, was approximately $8.7 million. The purchase price was paid in cash, funded through borrowings under the Company's credit facility. On a 12-month basis, the acquisitions are expected to add approximately $13.0 million of net revenue and approximately $0.005 per diluted share to earnings, excluding an estimated $35,000 after-tax acquisition-related charge to be recorded during the second quarter of fiscal 2008.

Outlook for 2008

The Company reported that comparable restaurant sales for the first four weeks of the second quarter of fiscal 2008 were approximately flat compared to the same period of the prior year.

The Company is currently estimating diluted earnings per share growth of 5-15% for fiscal 2008. This includes an estimated $0.01 to $0.02 positive per share impact resulting from the addition of the 53rd week in the fiscal year. As such, the fourth quarter of fiscal 2008 will contain 14 weeks versus 13 weeks in fiscal 2007.


This estimate is based, in part, on the following assumptions:

-- New company-owned restaurant openings of approximately 30; and

-- Comparable restaurant sales growth of flat to 1.0%.


Conference Call

The Company is hosting a conference call today, April 28, 2008, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (800) 289-0730. A replay of the call will be available until May 5, 2008. To access the replay, please dial (888) 203-1112, and use 7351424 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 293 restaurants system-wide in 44 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 for the full year 2008, 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 during full year 2008, the sales at these and our other company-owned and franchise restaurants, our ability to control restaurant operating costs, our ability to integrate the franchise restaurants which we have acquired, strength of consumer spending 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
--------------------------
March 25, March 27,
2008 2007
------------ ------------

Revenue:
Restaurant sales $ 208,601 $ 175,444
Franchise royalties and fees 2,612 2,893
------------ ------------

Total revenue 211,213 178,337
------------ ------------

Costs and expenses:
Restaurant operating costs:
Cost of sales 73,586 61,096
Labor 58,442 48,297
Rent 3,289 2,785
Other operating 33,250 27,893
Pre-opening 2,826 3,584
Depreciation and amortization 8,546 6,645
Impairment and closure 703 -
General and administrative 9,871 8,337
------------ ------------

Total costs and expenses 190,513 158,637
------------ ------------

Income from operations 20,700 19,700

Interest expense, net 642 236
Minority interest 261 289
Equity income from investments
in
unconsolidated affiliates 69 97
------------ ------------

Income before taxes 19,866 19,272
Provision for income taxes 6,953 6,976
------------ ------------

Net income $ 12,913 $ 12,296
============ ============

Net income per common share:
Basic $ 0.17 $ 0.17
============ ============
Diluted $ 0.17 $ 0.16
============ ============

Weighted average shares
outstanding:
Basic 74,744 74,327
============ ============
Diluted 76,443 76,726
============ ============


Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)



March 25, 2008 March 27, 2007
-------------- ---------------


Cash $ 18,173 $ 14,550
Other current assets 22,493 19,103
Property and equipment, net 406,143 323,072
Goodwill 101,674 86,649
Intangible asset, net 8,239 4,791
Other assets 3,894 2,719

-------------- ---------------
Total assets $ 560,616 $ 450,884
============== ===============


Current maturities of long-term debt
and obligations under capital leases $ 309 $ 459
Other current liabilities 82,876 63,872
Long-term debt and obligations under
capital leases, excluding current
maturities 75,402 29,989
Other liabilities 21,845 20,566
Minority interest 2,808 1,321
Stockholders' equity 377,376 334,677

-------------- ---------------
Total liabilities and stockholders'
equity $ 560,616 $ 450,884
============== ===============


Supplemental Financial and Operating Information
($ amounts in thousands)
(unaudited)


First Quarter Change
2008 2007 vs LY
---------- ---------- ---------

Restaurant openings
Company 6 10 (4)
Franchise 0 0 0
Total 6 10 (4)

Restaurant closures
Company (1) 0 (1)
Franchise 0 0 0
Total (1) 0 (1)

Restaurants open at the end of the
quarter
Company 209 173 36
Franchise 81 88 (7)
Total 290 261 29

Company-owned restaurants
Restaurant sales $ 208,601 $ 175,444 18.9%
Store weeks 2,667 2,161 23.4%
Comparable restaurant sales
growth (1) (1.2)% 0.9%
Average unit volume (2) $ 1,019 $ 1,048 (2.8)%

Restaurant costs (as a % of
restaurant sales)
Cost of sales 35.3% 34.8% 45bps
Labor 28.0% 27.5% 49bps
Rent 1.6% 1.6% (1)bps
Other operating 15.9% 15.9% 4bps
Total 80.8% 79.8% 97bps

Franchise-owned restaurants
Franchise royalties and fees $ 2,612 $ 2,893 (9.7)%
Store weeks 1,053 1,144 (8.0)%
Comparable restaurant sales
growth (1) (2.8)% 0.6%
Average unit volume (2) $ 960 $ 989 (2.9)%

Pre-opening expense $ 2,826 $ 3,584 (21.1)%

Depreciation and amortization $ 8,546 $ 6,645 28.6%
As a % of revenue 4.0% 3.7% 32bps

General and administrative expenses $ 9,871 $ 8,337 18.4%
As a % of revenue 4.7% 4.7% (0)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 volume for Q1 2007 was adjusted to reflect
restaurant sales of the nine acquired franchise stores as part of
Company-owned restaurants average unit volume and were excluded from
franchise-owned restaurants average unit volume.

NM - not meaningful
Amounts may not foot due to rounding.


SOURCE: Texas Roadhouse, Inc.



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