Texas Roadhouse, Inc. Announces Second Quarter 2015 Results

LOUISVILLE, Ky. - (BUSINESS WIRE) - Aug. 3, 2015 - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 30, 2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second Quarter

 

 

Year to Date

($000's)

 

 

2015

 

 

2014

 

 

% Change

 

 

2015

 

 

2014

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

$

454,698

 

 

$

395,363

 

 

15

 

 

 

$

914,928

 

 

$

792,505

 

 

15

Income from operations

 

 

 

31,696

 

 

 

34,401

 

 

(8

)

 

 

 

80,296

 

 

 

74,585

 

 

8

Net income

 

 

 

21,138

 

 

 

23,081

 

 

(8

)

 

 

 

53,430

 

 

 

49,546

 

 

8

Diluted EPS

 

 

$

0.30

 

 

$

0.33

 

 

(9

)

 

 

$

0.76

 

 

$

0.70

 

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results for the second quarter included the following highlights:

  • Comparable restaurant sales increased 8.2% at company restaurants and 6.9% at franchise restaurants;
  • Restaurant margin, as a percentage of restaurant sales, decreased 193 basis points to 16.2%. Food cost inflation of approximately 9.4%, mostly driven by beef, more than offset the impact of higher average unit volume;
  • Diluted earnings per share decreased 8.5% to $0.30 from $0.33 in the prior year;
  • Nine company-owned restaurants were opened, including two Bubba's 33 restaurants; and,
  • The Company repurchased 88,089 shares of its common stock for $3.1 million.

Results for year-to-date included the following highlights:

  • Comparable restaurant sales increased 8.5% at company restaurants and 7.5% at franchise restaurants;
  • Restaurant margin, as a percentage of restaurant sales, decreased 106 basis points to 17.6%. Food cost inflation of approximately 7.4%, mostly driven by beef, more than offset the impact of higher average unit volume;
  • Diluted earnings per share increased 8.2% to $0.76 from $0.70 in the prior year;
  • 12 company-owned restaurants were opened, including three Bubba's 33 restaurants; and,
  • The Company repurchased 88,089 shares of its common stock for $3.1 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are pleased to report strong sales momentum through the second quarter, as we generated double digit revenue gains driven by increasing guest counts and strong operating week growth. In spite of this solid top-line performance, commodity inflation of 9.4% resulted in earnings per share that were lower than the prior year period as it more than offset modest price increases taken in late 2014."

Taylor continued, "On the development front, our new restaurants continue to open with strong sales and we now expect to open approximately 30 company-owned restaurants in 2015. We remain focused on providing legendary food and legendary service, as well as a great value proposition to each and every guest, and as a result, we believe we are well-positioned for growth over the long-term."

2015 Outlook

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its third quarter of fiscal 2015 increased approximately 7.6% compared to the prior year period.

Management updated the following expectations for 2015:

  • Mid-single digit comparable restaurant sales growth;
  • Approximately 30 company restaurant openings, including as many as five Bubba's 33 restaurants;
  • Food cost inflation of 4.0% to 4.5% which implies 1.0% to 2.0% inflation for the second half of the year; and,
  • Total capital expenditures of $145 million to $155 million.

Management reiterated the following expectation for 2015:

  • An income tax rate of approximately 30.0% to 31.0% depending on the reinstatement of certain federal tax credits.

Conference Call

The Company is hosting a conference call today, August 3, 2015 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (888) 438-5449 or (719) 325-2443 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 5777050 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 465 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; breaches of security; 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

 

 

26 Weeks Ended

 

 

 

June 30, 2015

 

 

July 1, 2014

 

 

June 30, 2015

 

 

July 1, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

 

$

450,692

 

 

$

391,819

 

 

$

906,985

 

 

$

785,775

Franchise royalties and fees

 

 

 

4,006

 

 

 

3,544

 

 

 

7,943

 

 

 

6,730

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

 

454,698

 

 

 

395,363

 

 

 

914,928

 

 

 

792,505

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant operating costs (excluding depreciation and amortization shown separately below):

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

168,077

 

 

 

137,082

 

 

 

328,057

 

 

 

271,894

Labor

 

 

 

132,084

 

 

 

115,182

 

 

 

263,488

 

 

 

229,854

Rent

 

 

 

9,138

 

 

 

8,128

 

 

 

18,117

 

 

 

16,170

Other operating

 

 

 

68,358

 

 

 

60,362

 

 

 

137,675

 

 

 

121,215

Pre-opening

 

 

 

4,909

 

 

 

4,455

 

 

 

8,727

 

 

 

8,732

Depreciation and amortization

 

 

 

16,816

 

 

 

14,433

 

 

 

33,151

 

 

 

28,518

Impairment and closure

 

 

 

-

 

 

 

9

 

 

 

-

 

 

 

26

General and administrative

 

 

 

23,620

 

 

 

21,311

 

 

 

45,417

 

 

 

41,511

 

 

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

 

 

423,002

 

 

 

360,962

 

 

 

834,632

 

 

 

717,920

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

31,696

 

 

 

34,401

 

 

 

80,296

 

 

 

74,585

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

495

 

 

 

514

 

 

 

1,010

 

 

 

1,072

Equity income from investments in unconsolidated affiliates

 

 

 

467

 

 

 

353

 

 

 

839

 

 

 

565

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

 

 

31,668

 

 

 

34,240

 

 

 

80,125

 

 

 

74,078

Provision for income taxes

 

 

 

9,402

 

 

 

10,215

 

 

 

24,278

 

 

 

22,445

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

$

22,266

 

 

$

24,025

 

 

$

55,847

 

 

$

51,633

Less: Net income attributable to noncontrolling interests

 

 

 

1,128

 

 

 

944

 

 

 

2,417

 

 

 

2,087

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

 

$

21,138

 

 

$

23,081

 

 

$

53,430

 

 

$

49,546

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

0.30

 

 

$

0.33

 

 

$

0.76

 

 

$

0.71

Diluted

 

 

$

0.30

 

 

$

0.33

 

 

$

0.76

 

 

$

0.70

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

70,026

 

 

 

69,705

 

 

 

69,933

 

 

 

69,918

Diluted

 

 

 

70,648

 

 

 

70,577

 

 

 

70,588

 

 

 

70,822

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

June 30, 2015

 

 

December 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

70,965

 

 

$

86,122

Other current assets

 

 

 

57,953

 

 

 

61,604

Property and equipment, net

 

 

 

689,204

 

 

 

649,637

Goodwill

 

 

 

116,571

 

 

 

116,571

Intangible assets, net

 

 

 

5,515

 

 

 

6,203

Other assets

 

 

 

25,416

 

 

 

23,005

 

 

 

 

 

 

 

Total assets

 

 

$

965,624

 

 

$

943,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

 

 

136

 

 

 

129

Other current liabilities

 

 

 

201,598

 

 

 

215,842

Long-term debt, excluding current maturities

 

 

 

50,623

 

 

 

50,693

Other liabilities

 

 

 

61,437

 

 

 

61,522

Texas Roadhouse, Inc. and subsidiaries stockholders' equity

 

 

 

644,644

 

 

 

607,892

Noncontrolling interests

 

 

 

7,186

 

 

 

7,064

 

 

 

 

 

 

 

Total liabilities and equity

 

 

$

965,624

 

 

$

943,142

 

 

 

 

 

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

26 Weeks Ended

 

 

 

June 30, 2015

 

 

July 1, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

$

55,847

 

 

 

$

51,633

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

 

 

 

Depreciation and amortization

 

 

 

33,151

 

 

 

 

28,518

 

Share-based compensation expense

 

 

 

10,215

 

 

 

 

7,399

 

Other noncash adjustments

 

 

 

(2,992

)

 

 

 

(1,044

)

Change in working capital

 

 

 

(1,398

)

 

 

 

(4,769

)

Net cash provided by operating activities

 

 

 

94,823

 

 

 

 

81,737

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures - property and equipment

 

 

 

(70,933

)

 

 

 

(53,971

)

Proceeds from sale of property and equipment, including insurance proceeds

 

 

 

9

 

 

 

 

1,193

 

Net cash used in investing activities

 

 

 

(70,924

)

 

 

 

(52,778

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Repurchase shares of common stock

 

 

 

(3,138

)

 

 

 

(31,760

)

Dividends paid

 

 

 

(34,247

)

 

 

 

(10,473

)

Other financing activities

 

 

 

(1,671

)

 

 

 

(4,139

)

Net cash used in financing activities

 

 

 

(39,056

)

 

 

 

(46,372

)

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

 

(15,157

)

 

 

 

(17,413

)

Cash and cash equivalents - beginning of period

 

 

 

86,122

 

 

 

 

94,874

 

Cash and cash equivalents - end of period

 

 

$

70,965

 

 

 

$

77,461

 

 

 

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

 

 

 

2015

 

 

2014

 

 

vs LY

 

 

2015

 

 

2014

 

 

vs LY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant openings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

 

 

6

 

 

 

 

6

 

 

 

0

 

 

 

 

 

8

 

 

 

 

12

 

 

 

(4

)

 

Company - Bubba's 33

 

 

 

2

 

 

 

 

0

 

 

 

2

 

 

 

 

 

3

 

 

 

 

0

 

 

 

3

 

 

Company - Other

 

 

 

1

 

 

 

 

0

 

 

 

1

 

 

 

 

 

1

 

 

 

 

0

 

 

 

1

 

 

Franchise - Texas Roadhouse

 

 

 

1

 

 

 

 

0

 

 

 

1

 

 

 

 

 

1

 

 

 

 

1

 

 

 

0

 

 

Total

 

 

 

10

 

 

 

 

6

 

 

 

4

 

 

 

 

 

13

 

 

 

 

13

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurants open at the end of the quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company - Texas Roadhouse

 

 

 

376

 

 

 

 

357

 

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

Company - Bubba's 33

 

 

 

6

 

 

 

 

1

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

Company - Other

 

 

 

2

 

 

 

 

0

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

Franchise - Texas Roadhouse

 

 

 

80

 

 

 

 

75

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

464

 

 

 

 

433

 

 

 

31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

 

$

450,692

 

 

 

$

391,819

 

 

 

15.0

 

%

 

 

$

906,985

 

 

 

$

785,775

 

 

 

15.4

 

%

Store weeks

 

 

 

4,934

 

 

 

 

4,593

 

 

 

7.4

 

%

 

 

 

9,790

 

 

 

 

9,117

 

 

 

7.4

 

%

Comparable restaurant sales growth (1)

 

 

 

8.2

%

 

 

 

2.9

%

 

 

 

 

 

 

 

8.5

%

 

 

 

2.9

%

 

 

 

 

Texas Roadhouse restaurants only:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurant sales growth (1)

 

 

 

8.2

%

 

 

 

2.9

%

 

 

 

 

 

 

 

8.5

%

 

 

 

2.9

%

 

 

 

 

Average unit volume (2)

 

 

$

1,188

 

 

 

$

1,098

 

 

 

8.2

 

%

 

 

$

2,409

 

 

 

$

2,218

 

 

 

8.6

 

%

Weekly sales by group:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable restaurants (334 units)

 

 

$

91,346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average unit volume restaurants (27 units) (3)

 

 

$

91,468

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurants less than 6 months old (15 units)

 

 

$

95,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant operating costs (as a % of restaurant sales)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

37.3

%

 

 

 

35.0

%

 

 

231

 

 bps

 

 

 

36.2

%

 

 

 

34.6

%

 

 

157

 

 bps

Labor

 

 

 

29.3

%

 

 

 

29.4

%

 

 

(9

)

 bps

 

 

 

29.1

%

 

 

 

29.3

%

 

 

(20

)

 bps

Rent

 

 

 

2.0

%

 

 

 

2.1

%

 

 

(5

)

 bps

 

 

 

2.0

%

 

 

 

2.1

%

 

 

(6

)

 bps

Other operating

 

 

 

15.2

%

 

 

 

15.4

%

 

 

(24

)

 bps

 

 

 

15.2

%

 

 

 

15.4

%

 

 

(25

)

 bps

Total

 

 

 

83.8

%

 

 

 

81.9

%

 

 

193

 

 bps

 

 

 

82.4

%

 

 

 

81.3

%

 

 

106

 

 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant margin (4)

 

 

 

16.2

%

 

 

 

18.1

%

 

 

(193

)

 bps

 

 

 

17.6

%

 

 

 

18.7

%

 

 

(106

)

 bps

Restaurant margin ($ in thousands)

 

 

$

73,035

 

 

 

$

71,065

 

 

 

2.8

 

%

 

 

$

159,648

 

 

 

$

146,642

 

 

 

8.9

 

%

Restaurant margin $/Store week

 

 

$

14,804

 

 

 

$

15,472

 

 

 

(4.3

)

%

 

 

$

16,307

 

 

 

$

16,084

 

 

 

1.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise-owned restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise royalties and fees

 

 

$

4,006

 

 

 

$

3,544

 

 

 

13.0

 

%

 

 

$

7,943

 

 

 

$

6,730

 

 

 

18.0

 

%

Store weeks

 

 

 

1,032

 

 

 

 

975

 

 

 

5.8

 

%

 

 

 

2,059

 

 

 

 

1,937

 

 

 

6.3

 

%

Comparable restaurant sales growth (1)

 

 

 

6.9

%

 

 

 

3.5

%

 

 

 

 

 

 

 

7.5

%

 

 

 

3.6

%

 

 

 

 

Average unit volume (2)

 

 

$

1,274

 

 

 

$

1,174

 

 

 

8.5

 

%

 

 

$

2,580

 

 

 

$

2,364

 

 

 

9.1

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-opening expense

 

 

$

4,909

 

 

 

$

4,455

 

 

 

10.2

 

%

 

 

$

8,727

 

 

 

$

8,732

 

 

 

(0.1

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

$

16,816

 

 

 

$

14,433

 

 

 

16.5

 

%

 

 

$

33,151

 

 

 

$

28,518

 

 

 

16.2

 

%

As a % of revenue

 

 

 

3.7

%

 

 

 

3.7

%

 

 

5

 

 bps

 

 

 

3.6

%

 

 

 

3.6

%

 

 

2

 

 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

$

23,620

 

 

 

$

21,311

 

 

 

10.8

 

%

 

 

$

45,417

 

 

 

$

41,511

 

 

 

9.4

 

%

As a % of revenue

 

 

 

5.2

%

 

 

 

5.4

%

 

 

(20

)

 bps

 

 

 

5.0

%

 

 

 

5.2

%

 

 

(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.

(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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150803006175/en/.

SOURCE Texas Roadhouse, Inc.

Contacts:

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

Travis Doster
Texas Roadhouse, Inc.
Media Relations
502-638-5457

###

Share this Story:

Comments:

comments powered by Disqus

Franchise News Room »


News By Industry »


Featured Opportunities

Which Wich® Superior Sandwiches
Which Wich is changing the franchising game with our fun, personalized, and incredibly attractive business approach.
SpeedPro Imaging
SpeedPro Imaging is the ONLY franchise available exclusively focusing on wide format printing, the highest margin and fastest growing niche in the...
The Joint Corp.
The Joint® Chiropractic is reinventing chiropractic care. Our vision is to become the largest, most respected provider of chiropractic services...
Jimmy's Egg
Jimmy's Egg is now offering a unique opportunity to a select number of franchisees seeking to develop our proven brand in new markets.
Smoothie Factory
Are you interested in a health conscious franchise opportunity in a growing smoothie industry that does over $2 billion in annual sales in the United...

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)