• Home:
• News:
• Texas Roadhouse:

Texas Roadhouse, Inc. Announces Second Quarter 2013 Results

By: Texas Roadhouse |  2 Shares     104 Reads

LOUISVILLE, Ky. - (BUSINESS WIRE) - Jul. 29, 2013 - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 25, 2013.

				Second Quarter										Year to Date
($000's)				2013			2012			% Change				2013			2012			% Change
Total revenue				352,119			320,275			10				711,795			645,144			10
Income from operations (a)				29,797			31,247			(5)				67,965			60,649			12
Net income (a)				19,963			20,310			(2)				46,134			39,179			18
Diluted EPS (a)				$0.28			$0.28			(1)				$0.65			$0.55			18
(a) 2012 YTD includes a charge related to a legal settlement discussed below.

Results for the second quarter included:

• Diluted earnings per share remained relatively flat at $0.28 compared to the prior year period;
• Comparable restaurant sales increased 4.5% at company restaurants and 5.3% at franchise restaurants;
• Seven company restaurants and one franchise restaurant were opened;
• Restaurant margin, as a percentage of restaurant sales, decreased 47 basis points to 18.6% primarily due to higher commodity costs; and
• Higher than average spending on the Company’s annual managing partner conference, which marked its 20^th anniversary, impacted year-over-year operating results for the quarter as costs were $2.3 million higher compared to the prior year period.

Results for the year-to-date included:

• Excluding the impact of a prior year charge, diluted earnings per share increased 9.7% to $0.65 from $0.59 in the prior year. The year-to-date 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 4.1% at company restaurants and 4.5 % at franchise restaurants;
• 10 company and three franchise restaurants were opened;
• Restaurant margin, as a percentage of restaurant sales, decreased 32 basis points to 18.8%; and
• Costs associated with the Company’s annual managing partner conference were $2.4 million higher compared to the prior year period.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “We are pleased with our top-line momentum, which resulted in another quarter of solid revenue growth led by positive comparable restaurant sales. Our new restaurants continue to generate solid returns, and we are still generating sufficient cash flows to not only fund our restaurant growth, but also enhance our existing assets and return capital to shareholders. We are confident that our relentless focus on legendary food and service is the best way to continue driving market share gains in this economic environment.”

2013 Outlook

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its third quarter of fiscal 2013 increased 1.9% compared to the prior year period.

Management provided the following expectations for 2013:

• Positive comparable restaurant sales growth;
• Approximately 28 company restaurant openings;
• Food cost inflation of 6.5% to 7.0%, which is updated from the previous expectation of 6.0% to 7.0%;
• An income tax rate of 30.0% to 30.5% which is lower than the previous expectation 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, July 29, 2013, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (888) 277-7114 or (913) 312-6667 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 6656022 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 400 restaurants system-wide in 48 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, our ability to 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.

(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.

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
			13 Weeks Ended								26 Weeks Ended
			June 25, 2013				June 26, 2012				June 25, 2013				June 26, 2012
Revenue:
Restaurant sales			$	348,929			$	317,546			$	705,493			$	639,558
Franchise royalties and fees				3,190				2,729				6,302				5,586
Total revenue				352,119				320,275				711,795				645,144
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Cost of sales				120,212				106,860				244,764				216,515
Labor				101,723				93,235				203,384				186,582
Rent				7,152				6,379				14,209				12,631
Other operating				54,989				50,555				110,767				101,784
Pre-opening				4,240				2,780				7,064				6,365
Depreciation and amortization				12,190				11,546				24,402				22,893
Impairment and closure				27				20				84				39
General and administrative (1)				21,789				17,653				39,156				37,686
Total costs and expenses				322,322				289,028				643,830				584,495
Income from operations (1)				29,797				31,247				67,965				60,649
Interest expense, net				567				568				1,162				1,173
Equity income from investments in
unconsolidated affiliates				218				121				398				162
Income before taxes (1)				29,448				30,800				67,201				59,638
Provision for income taxes				8,583				9,952				19,117				19,037
Net income including noncontrolling interests (1)			$	20,865			$	20,848			$	48,084			$	40,601
Less: Net income attributable to noncontrolling interests				902				538				1,950				1,422
Net income attributable to Texas Roadhouse, Inc. and subsidiaries (1)			$	19,963			$	20,310			$	46,134			$	39,179
Net income per common share attributable to Texas Roadhouse, Inc.
and subsidiaries:
Basic			$	0.29			$	0.29			$	0.66			$	0.56
Diluted			$	0.28			$	0.28			$	0.65			$	0.55
Weighted average shares outstanding:
Basic				70,030				70,129				69,693				69,763
Diluted				71,267				71,587				70,924				71,247

(1) Results for the 26 weeks ended June 26, 2012 include a $5.0 million charge ($3.1 million after-tax) relating to the settlement of a legal matter. The settlement charge is included in general and administrative costs.

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
			June 25, 2013				December 25, 2012
Cash and cash equivalents			$	100,117			$	81,746
Other current assets				33,353				40,726
Property and equipment, net				542,211				531,654
Goodwill				113,454				113,435
Intangible assets, net				8,283				9,264
Other assets				15,983				14,429
Total assets			$	813,401			$	791,254
Current maturities of long-term debt
and obligations under capital leases				317				338
Other current liabilities				132,987				158,324
Long-term debt and obligations under
capital leases, excluding current maturities				51,120				51,264
Other liabilities				52,800				50,591
Texas Roadhouse, Inc. and subsidiaries stockholders' equity				570,380				525,084
Noncontrolling interests				5,797				5,653
Total liabilities and equity			$	813,401			$	791,254

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
			26 Weeks Ended
			June 25, 2013					June 26, 2012
Cash flows from operating activities:
Net income including noncontrolling interests			$	48,084				$	40,601
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization				24,402					22,893
Share-based compensation expense				6,971					6,324
Other noncash adjustments				552					(2,991	)
Change in working capital				(10,656	)				(7,289	)
Net cash provided by operating activities				69,353					59,538
Cash flows from investing activities:
Capital expenditures - property and equipment				(35,915	)				(42,547	)
Proceeds from sale of property and equipment, including insurance proceeds				4					106
Net cash used in investing activities				(35,911	)				(42,441	)
Cash flows from financing activities:
Repayments of revolving credit facility, net				-					(10,000	)
Dividends paid				(21,512	)				(11,806	)
Other financing activities				6,441					7,490
Net cash used in financing activities				(15,071	)				(14,316	)
Net increase in cash and cash equivalents				18,371					2,781
Cash and cash equivalents - beginning of year				81,746					78,777
Cash and cash equivalents - end of period			$	100,117				$	81,558

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
				2013					2012					vs LY					2013					2012					vs LY
Restaurant openings
Company - Texas Roadhouse					6					7				(1	)					9					15				(6	)
Company - Other					1					0				1						1					0				1
Franchise - Texas Roadhouse					1					0				1						3					0				3
Total					8					7				1						13					15				(2	)
Restaurants open at the end of the quarter
Company - Texas Roadhouse					327					306				21
Company - Other					3					3				0
Franchise - Texas Roadhouse					75					72				3
Total					405					381				24
Company-owned restaurants
Restaurant sales				$	348,929				$	317,546				9.9		%			$	705,493				$	639,558				10.3		%
Store weeks					4,214					3,962				6.4		%				8,388					7,813				7.4		%
Comparable restaurant sales growth (1)					4.5	%				4.5	%									4.1	%				5.3	%
Texas Roadhouse restaurants only:
Comparable restaurant sales growth (1)					4.5	%				4.5	%									4.1	%				5.3	%
Average unit volume (2)				$	1,077				$	1,038				3.7		%			$	2,188				$	2,118				3.3		%
Weekly sales by group:
Comparable restaurants (283 units)				$	83,433
Average unit volume restaurants (28 units)				$	76,603
Restaurants less than 6 months old (16 units)				$	85,810
Restaurant operating costs (as a % of restaurant sales) (3)
Cost of sales					34.5	%				33.7	%			80		bps				34.7	%				33.9	%			84		bps
Labor					29.2	%				29.4	%			(21	)	bps				28.8	%				29.2	%			(34	)	bps
Rent					2.0	%				2.0	%			4		bps				2.0	%				2.0	%			4		bps
Other operating					15.8	%				15.9	%			(16	)	bps				15.7	%				15.9	%			(21	)	bps
Total					81.4	%				80.9	%			47		bps				81.2	%				80.9	%			32		bps
Restaurant margin (4)					18.6	%				19.1	%			(47	)	bps				18.8	%				19.1	%			(32	)	bps
Franchise-owned restaurants
Franchise royalties and fees				$	3,190				$	2,729				16.9		%			$	6,302				$	5,586				12.8		%
Store weeks					966					936				3.2		%				1,332					1,872				(28.8	)	%
Comparable restaurant sales growth (1)					5.3	%				4.8	%									4.5	%				5.9	%
Average unit volume (2)				$	1,112				$	1,052				5.7		%			$	1,123				$	1,068				5.1		%
Pre-opening expense				$	4,240				$	2,780				52.5		%			$	7,064				$	6,365				11.0		%
Depreciation and amortization				$	12,190				$	11,546				5.6		%			$	24,402				$	22,893				6.6		%
As a % of revenue					3.5	%				3.6	%			(14	)	bps				3.4	%				3.5	%			(12	)	bps
General and administrative expenses (5)				$	21,789				$	17,653				23.4		%			$	39,156				$	37,686				3.9		%
As a % of revenue					6.2	%				5.5	%			68		bps				5.5	%				5.8	%			(34	)	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 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 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 26 weeks ended June 26, 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 26 weeks ended June 26, 2012.

			For the 26 weeks Ended
			June 25, 2013				June 26, 2012
Net income attributable to Texas Roadhouse, Inc. and subsidiaries, excluding settlement charge			$	46,134			$	42,240
Amount reserved for settlement of a legal matter, net of tax (1)			$	-			$	(3,062	)
Net income attributable to Texas Roadhouse, Inc. and subsidiaries			$	46,134			$	39,179
Weighted average diluted shares outstanding				70,924				71,247
Diluted earnings per share, excluding settlement charge			$	0.65			$	0.59
Impact of settlement charge on diluted earnings per share			$	-			$	(0.04	)
Diluted earnings per share			$	0.65			$	0.55

Source: Texas Roadhouse, Inc.

Contacts:

Texas Roadhouse

Investor Relations
Tonya Robinson
502-515-7300

Media
Travis Doster
502-638-5457

###

Comments:

comments powered by Disqus