Texas Roadhouse, Inc. Announces First Quarter 2014 Results

LOUISVILLE, Ky. - May 6, 2014 - (BUSINESS WIRE) - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 week period ended April 1, 2014.

      First Quarter
($000's)    

2014

   

2013

   

% Change

                     
Total revenue     397,142     359,676     10
Income from operations     40,184     38,168     5
Net income     26,465     26,171     1
Diluted EPS     $0.37     $0.37     0
                   

Results for the first quarter included:

  • Comparable restaurant sales increased 2.8% at company restaurants and 3.8% at franchise restaurants;
  • Six company and one franchise restaurant were opened;
  • Restaurant margin, as a percentage of restaurant sales, increased 25 basis points to 19.2%;
  • Income tax rate increased 280 basis points to 30.7%, primarily due to the expiration of certain federal tax credits at the end of 2013;
  • Diluted earnings per share was flat at $0.37 compared to the prior period due largely to the increase in the income tax rate mentioned above; and
  • Repurchased 960,000 shares of our common stock for $24.2 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "Our operating momentum continued during the first quarter with double-digit revenue growth. Positive comparable restaurant sales growth, including solid traffic growth, once again drove our top-line results and we are pleased to see our sales momentum extend into the second quarter. As we look ahead, we believe we are well-positioned for long-term success. We continue to open restaurants with six openings so far this year. Beyond new restaurant development, our balance sheet and cash flow remain healthy as we continue to internally fund our growth while returning excess capital to our shareholders through dividend payments and share repurchases."

2014 Outlook

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its second quarter of fiscal 2014 increased approximately 1.6% compared to the prior year period. Additionally, the Company noted that these results were negatively impacted by approximately 1.5% due to the calendar shift of Easter weekend to this four week April period as compared to the Company's first quarter of the prior year.

Management reiterated the following expectations for 2014:

  • Positive comparable restaurant sales growth;
  • 25 to 30 company restaurant openings;
  • Low single digit food cost inflation;
  • An income tax rate of approximately 30.0% to 31.0% which is higher than the 2013 income tax rate primarily as a result of the expiration of certain federal tax credits at the end of 2013; and
  • Total capital expenditures of $100.0 to $110.0 million.

Conference Call

The Company is hosting a conference call today, May 5, 2014 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 719-9801 or (719) 325-4834 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 8578726 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 425 restaurants system-wide in 48 states and three 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
      April 1, 2014     March 26, 2013
             
Revenue:            
Restaurant sales     $ 393,956     $ 356,564
Franchise royalties and fees       3,186       3,112
             
Total revenue       397,142       359,676
             
Costs and expenses:            
Restaurant operating costs (excluding depreciation and amortization shown separately below):  
Cost of sales       134,812       124,552
Labor       114,672       101,661
Rent       8,042       7,057
Other operating       60,853       55,778
Pre-opening       4,277       2,824
Depreciation and amortization       14,085       12,212
Impairment and closure       17       57
General and administrative       20,200       17,367
             
Total costs and expenses       356,958       321,508
             
Income from operations       40,184       38,168
             
Interest expense, net       558       595

Equity income from investments in unconsolidated affiliates

      212       180
             
Income before taxes       39,838       37,753
Provision for income taxes       12,230       10,534
             
Net income including noncontrolling interests     $ 27,608     $ 27,219
Less: Net income attributable to noncontrolling interests       1,143       1,048
Net income attributable to Texas Roadhouse, Inc. and subsidiaries     $ 26,465     $ 26,171
             

Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:

 
Basic     $ 0.38     $ 0.38
Diluted     $ 0.37     $ 0.37
             
Weighted average shares outstanding:            
Basic       70,132       69,359
Diluted       71,080       70,583
                 
             
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                 
                 
                (As Adjusted) (1)
          April 1, 2014     December 31, 2013
                 
                 
  Cash and cash equivalents     $ 90,696     $ 94,874
  Other current assets       42,654       50,869
  Property and equipment, net       596,656       586,212
  Goodwill       117,197       117,197
  Intangible assets, net       7,433       7,876
  Other assets       19,903       20,616
                 
  Total assets     $ 874,539     $ 877,644
                 
                 
 

Current maturities of long-term debt and obligations under capital leases

      240       243
  Other current liabilities       177,925       174,937
 

Long-term debt and obligations under capital leases, excluding current maturities

      50,922       50,990
  Other liabilities       57,112       57,614
  Texas Roadhouse, Inc. and subsidiaries stockholders' equity   582,140       587,659
  Noncontrolling interests       6,200       6,201
                 
  Total liabilities and equity     $ 874,539     $ 877,644
                 
                 
(1) December 31, 2013 revised to reflect the impact of adjustments to purchase price accounting related to 2013 acquisitions in accordance with generally accepted accounting principles ("GAAP").
   
             
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
             
             
      13 Weeks Ended
      April 1, 2014   March 26, 2013
             
             
Cash flows from operating activities:            
Net income including noncontrolling interests     $ 27,608       $ 27,219  
Adjustments to reconcile net income to net cash provided by operating activities            
Depreciation and amortization       14,085         12,212  
Share-based compensation expense       3,621         3,512  
Other noncash adjustments       (284 )       (110 )
Change in working capital       (66 )       (4,062 )
Net cash provided by operating activities       44,964         38,771  
             
Cash flows from investing activities:            
Capital expenditures - property and equipment       (23,087 )       (14,955 )
Proceeds from sale of property and equipment, including insurance proceeds       -         132  
Net cash used in investing activities       (23,087 )       (14,823 )
             
Cash flows from financing activities:            
Repurchase of shares of common stock       (24,172 )       -  
Dividends paid       -         (13,135 )
Other financing activities       (1,883 )       2,894  
Net cash used in financing activities       (26,055 )       (10,241 )
             
Net (decrease) increase in cash and cash equivalents       (4,178 )       13,707  
Cash and cash equivalents - beginning of year       94,874         81,746  
Cash and cash equivalents - end of period     $ 90,696       $ 95,453  
             

 

 
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group and restaurant margin per store week)
(unaudited)
                             
                             
          First Quarter       Change  
         

2014

   

2013

   

vs LY

 
                             
Restaurant openings                        
  Company - Texas Roadhouse       6         3       3    
  Company - Other       0         0       0    
  Franchise - Texas Roadhouse       1         2       (1 )  
  Total       7         5       2    
                             
                             
Restaurants open at the end of the quarter                        
  Company - Texas Roadhouse       351         321       30    
  Company - Other       1         2       (1 )  
  Franchise - Texas Roadhouse       75         74       1    
  Total       427         397       30    
                             
Company-owned restaurants                        
  Restaurant sales     $ 393,956       $ 356,564       10.5   %
  Store weeks       4,524         4,174       8.4   %
  Comparable restaurant sales growth (1)       2.8   %     3.5   %      
  Texas Roadhouse restaurants only:                        
    Comparable restaurant sales growth (1)       2.8   %     3.5   %      
    Average unit volume (2)     $ 1,121       $ 1,096       2.2   %
    Weekly sales by group:                        
    Comparable restaurants (310 units)     $ 86,670                  
    Average unit volume restaurants (19 units)     $ 78,958                  
    Restaurants less than 6 months old (22 units)     $ 102,589                  
                             
Restaurant operating costs (as a % of restaurant sales)                  
Cost of sales       34.2   %     34.9   %   (71 ) bps
Labor         29.1   %     28.5   %   60   bps
Rent         2.0   %     2.0   %   6   bps
Other operating       15.4   %     15.6   %   (20 ) bps
Total         80.8   %     81.1   %   (25 ) bps
                             
  Restaurant margin (3)       19.2   %     18.9   %   25   bps
  Restaurant margin $/Store week     $ 16,706       $ 16,175       3.3   %
                             
Franchise-owned restaurants                        
  Franchise royalties and fees     $ 3,186       $ 3,112       2.4   %
  Store weeks       962         945       1.8   %
  Comparable restaurant sales growth (1)       3.8   %     4.5   %      
  Average unit volume (2)     $ 1,191       $ 1,124       5.9   %
                             
Pre-opening expense     $ 4,277       $ 2,824       51.5   %
                             
Depreciation and amortization     $ 14,085       $ 12,212       15.3   %
  As a % of revenue       3.5   %     3.4   %   15   bps
                             
General and administrative expenses     $ 20,200       $ 17,367       16.3   %
  As a % of revenue       5.1   %     4.8   %   26   bps
                             
(1) Comparable restaurant sales growth reflects the change in sales over the same period of the prior year and includes sales from 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 Texas Roadhouse restaurants open six months as of the beginning of the measurement period, excluding sales from restaurants closed during the period.
 
(3) 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.

Contacts:

Tonya Robinson
Texas Roadhouse, Inc
Investor Relations
502-515-7300

Travis Doster
Media Relations
502-638-5457

SOURCE Texas Roadhouse, Inc.

News Provided by Acquire Media

###

Share this Story:

Comments:

comments powered by Disqus

Franchise News Room »


News By Industry »


Featured Opportunities

Quaker Steak & Lube®
Founded in 1974 in Sharon, PA, the award-winning casual dining restaurant chain has expanded over 55 locations throughout the United States and Canada
Delta Disaster Services
The Delta Disaster Services Franchise can put you in the multibillion dollar restoration industry with an average profit margin of 43%. Can you...
Firehouse Subs
We are currently looking for hard-working, dedicated people to become Area Representatives in markets throughout the United States.
Sbarro, LLC
An award-winning franchise company, Sbarro is known for selling XL NY pizza by the slice with dough made in-house daily & 100% Whole Milk...
Kinderdance
The largest and fastest growing "Education through Dance, Gymnastics and Music" program for children.

Subscribe to Franchising.com Express

A Franchise Update Media Production
Franchise Update Media | P.O. Box 20547 // San Jose, CA 95160 // PH. (408) 402-5681
Copyright © 2001 - 2017. All Rights Reserved.

In Loving Memory Of Timothy Gardner (1987-2014)