Texas Roadhouse, Inc. Announces Fourth Quarter 2014 Results

Increases Quarterly Dividend 13% to $0.17 per Share

LOUISVILLE, Ky. - (BUSINESS WIRE) - Feb. 23, 2015 - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 week periods ended December 30, 2014.

                               
        Fourth Quarter     Year to Date
($000's)    

2014

   

2013

 

% Change

   

2014

   

2013

 

% Change

                               
Total revenue     $ 404,425   $ 376,020   8     $ 1,582,148   $ 1,422,585   11
Income from operations     27,043   26,054   4     130,449   119,715   9
Net income     18,595   17,119   9     87,022   80,423   8
Diluted EPS     $0.26   $0.24   11     $1.23   $1.13   9

NOTE: Fourth quarter and full year 2014 results include 13 and 52 weeks, respectively, compared to 14 and 53 weeks in the fourth quarter and full year of 2013.

Results for the fourth quarter included the following highlights:

  • Diluted earnings per share increased 10.9% to $0.26 from $0.24 in the prior year. Diluted earnings per share in the prior year period was positively impacted by an estimated $0.03 to $0.04 as a result of the 14th week;
  • Comparable restaurant sales increased 7.0% at company restaurants and 5.7% at franchise restaurants on a comparable 13-week basis;
  • Seven Texas Roadhouse and two Bubba’s 33 company-owned restaurants were opened, along with five Texas Roadhouse franchise-owned restaurants;
  • Restaurant margin, as a percentage of restaurant sales, decreased 47 basis points to 16.5%, primarily due to food cost inflation of approximately 4.5%;
  • Income tax rate decreased 156 basis points to 27.7%, primarily due to the retroactive reinstatement of certain federal tax credits during the current year quarter; and
  • The Company repurchased 100,000 shares of its common stock for $2.8 million.

Results for the full year included the following highlights:

  • Diluted earnings per share increased 9.4% to $1.23 from $1.13 in the prior year. Diluted earnings per share in the prior year was positively impacted by an estimated $0.03 to $0.04 as a result of the 53rd week;
  • Comparable restaurant sales increased 4.7% at company restaurants and 4.9% at franchise restaurants on a comparable 52-week basis;
  • 22 Texas Roadhouse and two Bubba’s 33 company-owned restaurants were opened along with six franchise-owned restaurants;
  • Restaurant margin, as a percentage of restaurant sales, decreased 26 basis points to 17.6%;
  • Income tax rate increased 112 basis points to 30.0%, primarily due to the retroactive reinstatement of certain federal tax credits in 2013; and
  • The Company repurchased 1,675,000 shares of its common stock for $42.7 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are very pleased with our 2014 results and the fact that we achieved our fifth consecutive year of positive comparable restaurant sales growth. We reported double digit revenue growth and strong diluted earnings per share growth for the year, despite continued commodity cost pressures and the impact of lapping an extra week last year. At the same time, our healthy balance sheet and cash flow enabled us to return $74.1 million of capital to shareholders through share repurchases and quarterly dividend payments."

Taylor continued, "Looking ahead to 2015, our development pipeline is in great shape and we expect to open 25 to 30 company restaurants, as well as four to six franchise restaurants. Although we expect to face continued cost pressures in the near term, we remain excited by the ongoing momentum in our top-line and will continue to focus on our long-term brand positioning and growth potential."

2015 Outlook

The Company reported that comparable restaurant sales at company restaurants for the first seven weeks of fiscal 2015 increased approximately 12% compared to the prior year period.

Management reiterated the following expectations for 2015:

  • Positive comparable restaurant sales growth; and
  • 25 to 30 company restaurant openings, including as many as five Bubba's 33 restaurants.

Management updated the following expectations for 2015:

  • Food cost inflation of 3% to 4%;
  • An income tax rate of approximately 30.0% to 31.0% depending on the reinstatement of certain federal tax credits; and
  • Total capital expenditures of $135 million to $145 million.

Cash Dividend Payment

On February 18, 2015, the Company’s Board of Directors authorized the payment of a quarterly cash dividend of $0.17 per share of common stock. This payment, which will be distributed on April 3, 2015 to shareholders of record at the close of business on March 18, 2015, represents a 13% increase from the cash dividend of $0.15 per share of common stock declared during each quarter of 2014.

Conference Call

The Company is hosting a conference call today, February 23, 2015 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 719-9791 or (719) 325-4765 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 7805752 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 450 restaurants system-wide in 49 states and four 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 and 14 Weeks Ended   52 and 53 Weeks Ended
     

December 30,

2014

 

December 31,

2013

 

December 30,

2014

 

December 31,

2013

                       
Revenue:                      
Restaurant sales     $ 400,790     $ 372,879     $ 1,568,556     $ 1,410,118  
Franchise royalties and fees       3,635       3,141       13,592       12,467  
                       
Total revenue       404,425       376,020       1,582,148       1,422,585  
                       
Costs and expenses:                      
Restaurant operating costs (excluding depreciation and amortization shown separately below):            
Cost of sales       143,592       130,972       553,144       492,306  
Labor       116,744       109,007       459,119       411,394  
Rent       8,624       7,588       33,174       28,978  
Other operating       65,848       62,166       246,339       224,882  
Pre-opening       5,775       6,081       18,452       17,891  
Depreciation and amortization       15,497       14,698       59,179       51,562  
Impairment and closure       626      

212

      636       399  
Gain on sale of other concept       -       (1,800 )           (1,800 )
General and administrative       20,676       21,042       81,656       77,258  
                       
Total costs and expenses       377,382       349,966       1,451,699       1,302,870  
                       
Income from operations       27,043       26,054       130,449       119,715  
                       
Interest expense, net       520       514       2,084       2,201  

Equity income from investments in unconsolidated affiliates

     

627

      142       1,602       713  
                       
Income before taxes       27,150       25,682       129,967       118,227  
Provision for income taxes       7,528       7,523       38,990       34,140  
                       
Net income including noncontrolling interests     $ 19,622     $ 18,159     $ 90,977     $ 84,087  
Less: Net income attributable to noncontrolling interests       1,027       1,040       3,955       3,664  
Net income attributable to Texas Roadhouse, Inc. and subsidiaries     $ 18,595     $ 17,119     $ 87,022     $ 80,423  
                       

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

                     
Basic     $ 0.27     $ 0.24     $ 1.25     $ 1.15  
Diluted     $ 0.26     $ 0.24     $ 1.23     $ 1.13  
                       
Weighted average shares outstanding:                      
Basic       69,500       70,581       69,719       70,089  
Diluted       70,359       71,813       70,608       71,362  
                                   

 

   
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
               
              (As Adjusted) (1)
        December 30, 2014   December 31, 2013
               
               
  Cash and cash equivalents   $ 86,122     $ 94,874
  Other current assets     61,604       50,869
  Property and equipment, net     649,637       586,212
  Goodwill     116,571       117,197
  Intangible assets, net     6,203       7,876
  Other assets     23,005       20,616
               
  Total assets   $ 943,142     $ 877,644
               
               
  Current maturities of long-term debt     129       243
  Other current liabilities     215,842       175,609
  Long-term debt, excluding current maturities     50,693       50,990
  Other liabilities     61,522       56,942
  Texas Roadhouse, Inc. and subsidiaries stockholders' equity     607,892       587,659
  Noncontrolling interests     7,064       6,201
               
  Total liabilities and equity   $ 943,142     $ 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)
             
      52 and 53 Weeks Ended
      December 30, 2014        December 31, 2013
             
             
Cash flows from operating activities:            
Net income including noncontrolling interests     $ 90,977       $ 84,087  
Adjustments to reconcile net income to net cash provided by operating activities            
Depreciation and amortization       59,179         51,562  
Share-based compensation expense       14,883         14,740  
Other noncash adjustments       4,078         1,142  
Change in working capital       22,596         22,305  
Net cash provided by operating activities       191,713         173,836  
             
Cash flows from investing activities:            
Capital expenditures - property and equipment       (125,445 )       (111,478 )
Investment in unconsolidated affiliates       -         (1,180 )
Proceeds from sale of other concept, net       -         1,387  
Proceeds from sale of property and equipment, including insurance proceeds       1,205         23  
Net cash used in investing activities       (124,240 )       (111,248 )
             
Cash flows from financing activities:            
Repurchase shares of common stock       (42,744 )       (12,761 )
Dividends paid       (31,333 )       (46,877 )
Other financing activities       (2,148 )       10,178  
Net cash used in financing activities       (76,225 )       (49,460 )
             
Net (decrease) increase in cash and cash equivalents       (8,752 )       13,128  
Cash and cash equivalents - beginning of period       94,874         81,746  
Cash and cash equivalents - end of period     $ 86,122       $ 94,874  
             

 

 
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
                                         
    Fourth Quarter     Change       Year to Date     Change
   

2014

   

2013

   

vs LY

     

2014

   

2013

   

vs LY

                                         
Restaurant openings                                        
Company - Texas Roadhouse     7         12       (5 )         22         25       (3 )    
Company - Bubba's 33     2         0       2           2         1       1      
Company - Other     1         0       1           1         0       1      
Franchise - Texas Roadhouse     5         1       4           6         4       2      
Total     15         13       2           31         30       1      
                                         
                                         
Restaurant acquisitions/dispositions                                        
Company - Texas Roadhouse     1         2       (1 )         1         2       (1 )    
Company - Bubba's 33     0         0       0           0         0       0      
Company - Other     0         (2 )     2           0         (2 )     2      
Franchise - Texas Roadhouse     (1 )       (2 )     1           (1 )       (2 )     1      
Total     0         (2 )     2           0         (2 )     2      
                                         
Restaurants open at the end of the quarter                                        
Company - Texas Roadhouse     368         345       23                          
Company - Bubba's 33     3         1       2                          
Company - Other     1         0       1                          
Franchise - Texas Roadhouse     79         74       5                          
Total     451         420       31                          
                                         
Company-owned restaurants                                        
Restaurant sales   $ 400,790       $ 372,879       7.5   %     $ 1,568,556       $ 1,410,118       11.2     %
Store weeks     4,766         4,744       0.5   %       18,565         17,426       6.5     %
Comparable restaurant sales growth (1)     7.0   %     2.1   %             4.7   %     3.4   %        
Texas Roadhouse restaurants only:                                        
Comparable restaurant sales growth (1)     7.0         2.1                 4.7         3.4   %        
Average unit volume (2)   $ 1,083       $ 1,015       6.7   %     $ 4,355       $ 4,186       4.0     %
Weekly sales by group:                                        
Comparable restaurants (324 units)   $ 83,563                                      
Average unit volume restaurants (28 units) (3)   $ 80,659                                      
Restaurants less than 6 months old (16 units)   $ 102,811                                      
                                         
Restaurant operating costs (as a % of restaurant sales)                                        
Cost of sales     35.8   %     35.1   %   70   bps       35.3   %     34.9   %   35     bps
Labor     29.1   %     29.2   %   (11 ) bps       29.3   %     29.2   %   10     bps
Rent     2.2   %     2.0   %   12   bps       2.1   %     2.1   %   6     bps
Other operating     16.4   %     16.7   %   (24 ) bps       15.7   %     15.9   %   (24 )   bps
Total     83.5   %     83.1   %   47   bps       82.4   %     82.1   %   26     bps
                                         
Restaurant margin (4)     16.5   %     16.9   %   (47 ) bps       17.6   %     17.9   %   (26 )   bps
Restaurant margin ($ in thousands)   $ 65,982       $ 63,148       4.5   %     $ 276,782       $ 252,559       9.6     %
Restaurant margin $/Store week   $ 13,844       $ 13,311       4.0   %     $ 14,909       $ 14,493       2.9     %
                                         
Franchise-owned restaurants                                        
Franchise royalties and fees   $ 3,635       $ 3,141       15.7   %     $ 13,592       $ 12,467       9.0     %
Store weeks     998         1,051       (5.0 ) %       3,910         3,937       (0.7 )   %
Comparable restaurant sales growth (1)     5.7   %     4.5   %             4.9   %     4.3   %        
Average unit volume (2)   $ 1,171       $ 1,094       7.0   %     $ 4,627       $ 4,346       6.5     %
                                         
Pre-opening expense   $ 5,775       $ 6,081       (5.0 ) %     $ 18,452       $ 17,891       3.1     %
                                         
Depreciation and amortization   $ 15,497       $ 14,698       5.4   %     $ 59,179       $ 51,562       14.8     %
As a % of revenue     3.8   %     3.9   %   (8 ) bps       3.7   %     3.6   %   12     bps
                                         
General and administrative expenses   $ 20,676       $ 21,042       (1.7 ) %     $ 81,656       $ 77,258       5.7     %
As a % of revenue     5.1   %     5.6   %   (48 ) bps       5.2   %     5.4   %   (27 )   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. Q4 2013 and 2013 YTD were adjusted to include 13 and 52 weeks, respectively.
 
(3) Average unit volume restaurants include restaurants open a full six to 18 months before the beginning of the period measured.
 
(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 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.

SOURCE Texas Roadhouse, Inc.

Contacts:

Tonya Robinson
Texas Roadhouse, Inc.
Investor Relations
502-515-7269

Travis Doster
Media Relations
502-638-5457

###

Share this Story:

Comments:

comments powered by Disqus

Franchise News Room »


News By Industry »


Featured Opportunities

Dickey's Barbecue Pit®
Since 1941 Dickey's Barbecue Pit® has been treating customers to great tasting barbecue and has become a restaurant icon in the process! Now you can...
Gloria Jean's Coffees
Gloria Jean's is known for its range of boldly flavored coffees and signature beverages. For nearly four decades, we have continued to innovate and...
Red Mango
Based in Dallas and with more than 300 locations across the U.S., Mexico, El Salvador and Uruguay, Red Mango is a rapidly-expanding retailer of...
Anytime Fitness
Align with the world leader in fitness. Recurring-revenue business model, multi-club ownership potential. Don’t just join a franchise, join a...
Fantastic Sams
Fantastic Sams® is one of the most recognized brands in the hair care industry with nearly 1,200 full-service salons in North America and 40 years...

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)