Texas Roadhouse, Inc. Announces First Quarter 2013 Results

LOUISVILLE, Ky.- (BUSINESS WIRE) - Apr. 29, 2013 - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 week period ended March 26, 2013.

                   
              First Quarter
      ($000's)    

2013

   

2012

   

% Change

                           
      Total revenue       359,676       324,869     11
      Income from operations (1)       38,168       29,402     30
      Net income (1)       26,171       18,869     39
      Diluted EPS (1)     $ 0.37     $ 0.27     39
             
      (1) First Quarter 2012 results include a one-time charge as discussed below.
     

Results for the first quarter included:

  • Excluding the impact of a prior year charge, diluted earnings per share increased 19.8% to $0.37 from $0.31 in the prior year period. The first quarter 2012 results included a pre-tax charge of $5.0 million ($3.1 million after-tax) which had a negative $0.04 impact on diluted earnings per share;
  • Comparable restaurant sales increased 3.5% at company restaurants and 4.5% at franchise restaurants;
  • Three company and two franchise restaurants were opened;
  • Restaurant margin, as a percentage of restaurant sales, decreased 17 basis points to 18.9% primarily due to higher commodity costs.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “Our operating momentum continued during the first quarter with double-digit revenue and diluted earnings per share growth. Additionally, we are encouraged by positive comparable restaurant sales and traffic growth in the first quarter, which continued through the first four weeks of our second quarter. Our success is a direct result of our team’s ongoing commitment to providing legendary food and service to our guests. Texas Roadhouse remains well-positioned through the combination of our continued focus on operations, new restaurant growth and our commitment to returning capital to shareholders, which we believe will drive shareholder value over the long-term.”

2013 Outlook

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its second quarter of fiscal 2013 increased approximately 5.7% compared to the prior year period.

Management reiterated the following expectations for 2013:

  • Positive comparable restaurant sales growth;
  • Approximately 28 company restaurant openings;
  • Food cost inflation of 6.0% to 7.0%;
  • An income tax rate of approximately 31.0%; and
  • Total capital expenditures of $100.0 to $105.0 million.

Conference Call

The Company is hosting a conference call today, April 29, 2013, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (888) 637-7734 or (913) 312-0970 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 7306796 as the pass code. There will be a simultaneous Web cast conducted at www.texasroadhouse.com.

About Texas Roadhouse

Texas Roadhouse is a casual dining concept that first opened in 1993 and today operates over 395 restaurants system-wide in 47 states and two 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.


 
         
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
             
             
      13 Weeks Ended
      March 26, 2013     March 27, 2012
             
Revenue:            
Restaurant sales     $ 356,564     $ 322,012
Franchise royalties and fees       3,112       2,857
             
Total revenue       359,676       324,869
             
Costs and expenses:            

Restaurant operating costs (excluding depreciation and

       

amortization shown separately below):

           
Cost of sales       124,552       109,655
Labor       101,661       93,347
Rent       7,057       6,252
Other operating       55,778       51,229
Pre-opening       2,824       3,585
Depreciation and amortization       12,212       11,347
Impairment and closure       57       19
General and administrative (1)       17,367       20,033
             
Total costs and expenses       321,508       295,467
             
Income from operations       38,168       29,402
             
Interest expense, net       595       605
Equity income from investments in            
unconsolidated affiliates       180       41
             
Income before taxes       37,753       28,838
Provision for income taxes       10,534       9,085
             
Net income including noncontrolling interests (1)     $ 27,219     $ 19,753
Less: Net income attributable to noncontrolling interests       1,048       884
Net income attributable to Texas Roadhouse, Inc. and subsidiaries (1)     $ 26,171     $ 18,869
             
Net income per common share attributable to Texas Roadhouse, Inc.            
and subsidiaries:            
Basic     $ 0.38     $ 0.27
Diluted     $ 0.37     $ 0.27
             
Weighted average shares outstanding:            
Basic       69,359       69,405
Diluted       70,583       70,830

 

       

(1) Results for the 13 weeks ended March 27, 2012 include a $5.0 million charge, before the statutory income tax rate, relating to the settlement of a legal matter. The settlement is included in general and administrative costs.

             
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
             
             
             
      March 26, 2013     December 25, 2012
             
             
Cash and cash equivalents     $ 95,453     $ 81,746
Other current assets       33,626       40,726
Property and equipment, net       534,670       531,654
Goodwill       113,543       113,435
Intangible assets, net       8,689       9,264
Other assets       15,447       14,429
             
Total assets     $ 801,428     $ 791,254
             
             
Current maturities of long-term debt            
and obligations under capital leases       337       338
Other current liabilities       142,006       158,324
Long-term debt and obligations under            
capital leases, excluding current maturities       51,183       51,264
Other liabilities       51,465       50,591
Texas Roadhouse, Inc. and subsidiaries stockholders' equity       550,684       525,084
Noncontrolling interests       5,753       5,653
             
Total liabilities and equity     $ 801,428     $ 791,254
                 
             
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
             
             
      13 Weeks Ended
      March 26, 2013     March 27, 2012
             
             
Cash flows from operating activities:            
Net income including noncontrolling interests     $ 27,219       $ 19,753  
Adjustments to reconcile net income to net cash provided by operating activities            
Depreciation and amortization       12,212         11,347  
Share-based compensation expense       3,512         3,053  
Other noncash adjustments       (110 )       (1,781 )
Change in working capital       (3,416 )       5,522  
Net cash provided by operating activities       39,417         37,894  
             
Cash flows from investing activities:            
Capital expenditures - property and equipment       (15,601 )       (22,839 )
Proceeds from sale of property and equipment, including insurance proceeds       132         98  
Net cash used in investing activities       (15,469 )       (22,741 )
             
Cash flows from financing activities:            
Repayments of revolving credit facility, net       -         (10,000 )
Dividends paid       (13,135 )       (5,535 )
Other financing activities       2,894         3,107  
Net cash used in financing activities       (10,241 )       (12,428 )
             
Net increase in cash and cash equivalents       13,707         2,725  
Cash and cash equivalents - beginning of year       81,746         78,777  
Cash and cash equivalents - end of period     $ 95,453       $ 81,502  
                     
                               
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
                                 
                                 
        First Quarter         Change    
        2013         2012         vs LY    
                                 
Restaurant openings                              
Company - Texas Roadhouse       3           8         (5 )    
Company - Aspen Creek       0           0         0      
Franchise - Texas Roadhouse       2           0         2      
Total       5           8         (3 )    
                                 
                                 
Restaurants open at the end of the quarter                              
Company - Texas Roadhouse       321           299         22      
Company - Aspen Creek       2           3         (1 )    
Franchise - Texas Roadhouse       74           72         2      
Total       397           374         23      
                                 
Company-owned restaurants                              
Restaurant sales     $ 356,564         $ 322,012         10.7     %
Store weeks       4,174           3,851         8.4     %
Comparable restaurant sales growth (1)       3.5   %       6.0   %          
Texas Roadhouse restaurants only:                              
Comparable restaurant sales growth (1)       3.5   %       6.0   %          
Average unit volume (2)     $ 1,111         $ 1,081         2.8     %
Weekly sales by group:                              
Comparable restaurants (278 units)     $ 86,042                        
Average unit volume restaurants (30 units)     $ 80,119                        
Restaurants less than 6 months old (13 units)     $ 88,660                        
                                 
Restaurant operating costs (as a % of restaurant sales) (3)                        
Cost of sales       34.9   %       34.1   %     88     bps
Labor         28.5   %       29.0   %     (48 )   bps
Rent         2.0   %       1.9   %     4     bps
Other operating       15.6   %       15.9   %     (27 )   bps
Total         81.1   %       80.9   %     17     bps
                                 
Restaurant margins (4)       18.9   %       19.1   %     (17 )   bps
                                 
Franchise-owned restaurants                              
Franchise royalties and fees     $ 3,112         $ 2,857         8.9     %
Store weeks       945           936         1.0     %
Comparable restaurant sales growth (1)       4.5   %       6.9   %          
Average unit volume (2)     $ 1,133         $ 1,062         6.7     %
                                 
Pre-opening expense     $ 2,824         $ 3,585         (21.2 )   %
                                 
Depreciation and amortization     $ 12,212         $ 11,347         7.6     %
As a % of revenue       3.4   %       3.5   %     (10 )   bps
                                 
General and administrative expenses (5)     $ 17,367         $ 20,033         (13.3 )   %
As a % of revenue       4.8   %       6.2   %     (134 )   bps

 

                             

(1) Comparable restaurant sales growth includes sales from domestic restaurants open 18 months as of the beginning of the measurement period, excluding sales from restaurants closed during the period.

(2) Average unit volume includes sales from domestic Texas Roadhouse restaurants open six months as of the beginning of the measurement period, excluding sales from restaurants closed during the period.

(3) Depreciation and amortization expense, substantially all of which relates to restaurant-level assets, is excluded from restaurant operating costs and is shown separately as it represents a non-cash charge for the investment in our restaurants.

(4) Restaurant margins represent 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 generally accepted accounting principles ("GAAP") and should not be considered in isolation, or as an alternative, to income from operations or other similarly titled measures of other companies.

(5) Results for the 13 weeks ended March 27, 2012 included a $5.0 million pre-tax charge for the settlement of a legal matter.

Amounts may not foot due to rounding.

Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information
(in thousands, except per share data)
(unaudited)

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") throughout this document, the Company has provided non-GAAP measurements which present operating results on a basis before the impact of a settlement of a legal matter. This item is described in detail throughout this document.

The Company used earnings before the impact of the legal settlement as a key performance measure of results of operations for purposes of evaluating performance internally. This non-GAAP measurement is not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of results before the legal settlement provides additional information to facilitate the comparison of past and present operations, excluding items that the Company does not believe were indicative of our ongoing operations in the 13 weeks endedMarch 27, 2012.

       
      For the 13 weeks Ended
      March 26, 2013     March 27, 2012
Net income attributable to Texas Roadhouse, Inc. and subsidiaries, excluding settlement charge     $ 26,171     $ 21,931  
Amount reserved for settlement of a legal matter, net of tax (1)     $ -     $ (3,062 )
Net income attributable to Texas Roadhouse, Inc. and subsidiaries     $ 26,171     $ 18,869  
             
Weighted average diluted shares outstanding       70,583       70,830  
             
Diluted earnings per share, excluding settlement charge     $ 0.37     $ 0.31  
Impact of settlement charge on diluted earnings per share     $ -     $ (0.04 )
Diluted earnings per share     $ 0.37     $ 0.27  
                   

(1) Amount reserved in the first quarter of fiscal 2012 for the settlement of a legal matter was $5.0 million before the statutory income tax rate. The settlement amount was included in general and administrative costs on the Company's Condensed Consolidated Statements of Income.

Source: Texas Roadhouse, Inc.

Contacts:

Texas Roadhouse

Investor Relations
Tonya Robinson
502-515-7300

Media
Travis Doster
502-638-5457

###

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