Texas Roadhouse, Inc. Announces Fourth Quarter 2015 Results

By: Texas Roadhouse | 0 Shares 65 Reads

Increases Quarterly Dividend 12% to $0.19 per Share

LOUISVILLE, Ky. - (BUSINESS WIRE) - Feb. 22, 2016 - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 week periods ended December 29, 2015.

	Fourth Quarter					Year to Date
($000's)	2015		2014		% Change	2015		2014		% Change

Total revenue	$	454,351	$	404,425	12	$	1,807,368	$	1,582,148	14
Income from operations		33,713		27,043	25		144,565		130,449	11
Net income		22,982		18,595	24		96,894		87,022	11
Diluted EPS	$	0.32	$	0.26	23	$	1.37	$	1.23	11

Results for the fourth quarter included the following highlights:

Comparable restaurant sales growth of 4.5% at company restaurants and 4.0% at franchise restaurants;
Restaurant margin, as a percentage of restaurant sales, increased 112 basis points to 17.6%, primarily driven by lower other operating costs and lower food costs;
Diluted earnings per share increased 22.7% to $0.32 from $0.26 in the prior year;
Seven company-owned Texas Roadhouse restaurants were opened; and,
The Company repurchased 189,700 shares of its common stock for $6.7 million.

Results for the full year included the following highlights:

Comparable restaurant sales growth of 7.2% at company restaurants and 6.5% at franchise restaurants;
Restaurant margin, as a percentage of restaurant sales, decreased 30 basis points to 17.3%. Food cost inflation of approximately 4.9%, driven by beef, more than offset the impact of higher average unit volume;
Diluted earnings per share increased 11.1% to $1.37 from $1.23 in the prior year;
29 company-owned restaurants were opened, including four Bubba's 33 restaurants; and,
The Company repurchased 321,789 shares of its common stock for $11.4 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We ended the year on a strong note, with double digit revenue and diluted earnings per share growth for both the fourth quarter and the full year. This represents our 24th consecutive quarter of positive comparable restaurant sales growth, which is a testament to our Managing Partners. In addition, our solid balance sheet and healthy cash flow allowed us to open 29 restaurants, while returning $58 million of excess capital to shareholders through quarterly dividend payments and share repurchases throughout the year."

Taylor continued, "We have assembled a substantial pipeline of new locations and are on track to open approximately 30 company restaurants this year. Our top-line momentum has continued into 2016 and we are pleased to have seen continued traffic growth during the first seven weeks of the year. Looking ahead, we will stay focused on solidifying our long-term brand position and capitalizing on our growth potential."

2016 Outlook

The Company reported that comparable restaurant sales growth of at company restaurants for the first seven weeks of its first quarter of fiscal 2016 was approximately 4.4% compared to the prior year period.

Management updated the following expectations for 2016:

Approximately 30 company restaurant openings, including approximately seven Bubba's 33 restaurants;
1.0% to 2.0% food cost deflation;
An income tax rate of approximately 30.0%; and,
Total capital expenditures of $165.0 million to $175.0 million.

Management reiterated the expectation of positive comparable restaurant sales growth for 2016.

Cash Dividend Payment

On February 19, 2016, the Company's Board of Directors authorized the payment of a quarterly cash dividend of $0.19 per share of common stock. This payment, which will be distributed on April 1, 2016 to shareholders of record at the close of business on March 16, 2016, represents a 12% increase from the cash dividend of $0.17 per share of common stock declared during each quarter of 2015 and represents our fifth consecutive year of dividend payments.

Conference Call

The Company is hosting a conference call today, February 22, 2016 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 874-1571 or (719) 325-4839 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 1297446 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 485 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; food safety and food borne illness concerns; 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				52 Weeks Ended
			December 29, 2015		December 30, 2014		December 29, 2015		December 30, 2014

Revenue:
	Restaurant sales		$	450,529	$	400,790	$	1,791,446	$	1,568,556
	Franchise royalties and fees			3,822		3,635		15,922		13,592

Total revenue				454,351		404,425		1,807,368		1,582,148

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

		Cost of sales		159,301		143,592		644,001		553,144
		Labor		131,517		116,744		524,203		459,119
		Rent		9,741		8,624		37,183		33,174
		Other operating		70,773		65,848		275,296		246,339
	Pre-opening			4,640		5,775		19,116		18,452
	Depreciation and amortization			18,700		15,497		69,694		59,179
	Impairment and closure			974		626		974		636
	General and administrative			24,992		20,676		92,336		81,656

Total costs and expenses				420,638		377,382		1,662,803		1,451,699

Income from operations				33,713		27,043		144,565		130,449

Interest expense, net				479		520		1,959		2,084
Equity income from investments in unconsolidated affiliates				353		627		1,641		1,602

Income before taxes				33,587		27,150		144,247		129,967
Provision for income taxes				9,567		7,528		42,986		38,990

Net income including noncontrolling interests			$	24,020	$	19,622	$	101,261	$	90,977
Less: Net income attributable to noncontrolling interests				1,038		1,027		4,367		3,955
Net income attributable to Texas Roadhouse, Inc. and subsidiaries			$	22,982	$	18,595	$	96,894	$	87,022

Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
	Basic		$	0.33	$	0.27	$	1.38	$	1.25
	Diluted		$	0.32	$	0.26	$	1.37	$	1.23

Weighted average shares outstanding:
	Basic			70,143		69,500		70,032		69,719
	Diluted			70,865		70,359		70,747		70,608







Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)


	December 29, 2015		December 30, 2014


Cash and cash equivalents	$	59,334	$	86,122
Other current assets		74,479		61,604
Property and equipment, net		751,288		649,637
Goodwill		116,571		116,571
Intangible assets, net		4,827		6,203
Other assets		26,207		23,005

Total assets	$	1,032,706	$	943,142


Current maturities of long-term debt		144		129
Other current liabilities		256,498		215,842
Long-term debt, excluding current maturities		25,550		50,693
Other liabilities		73,332		61,522
Texas Roadhouse, Inc. and subsidiaries stockholders' equity		669,662		607,892
Noncontrolling interests		7,520		7,064

Total liabilities and equity	$	1,032,706	$	943,142







Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)


			52 Weeks Ended
			December 29, 2015			December 30, 2014


Cash flows from operating activities:
Net income including noncontrolling interests			$	101,261		$	90,977
Adjustments to reconcile net income to net cash provided by operating activities
	Depreciation and amortization			69,694			59,179
	Share-based compensation expense			22,825			14,883
	Other noncash adjustments			5,697			4,078
Change in working capital				28,464			22,596
		Net cash provided by operating activities		227,941			191,713

Cash flows from investing activities:
Capital expenditures - property and equipment				(173,475	)		(125,445	)
Proceeds from sale of property and equipment, including insurance proceeds				272			1,205
		Net cash used in investing activities		(173,203	)		(124,240	)

Cash flows from financing activities:
Repayments of revolving credit facility				(25,000	)		-
Repurchase shares of common stock				(11,397	)		(42,744	)
Dividends paid				(46,176	)		(31,333	)
Other financing activities				1,047			(2,148	)
		Net cash used in financing activities		(81,526	)		(76,225	)

		Net decrease in cash and cash equivalents		(26,788	)		(8,752	)
Cash and cash equivalents - beginning of period				86,122			94,874
Cash and cash equivalents - end of period			$	59,334		$	86,122







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
			2015			2014			vs LY		2015			2014			vs LY

Restaurant openings
	Company - Texas Roadhouse			7			7		0			24			22		2
	Company - Bubba's 33			0			2		(2	)		4			2		2
	Company - Other			0			1		(1	)		1			1		0
	Franchise - Texas Roadhouse			1			5		(4	)		3			6		(3	)
	Total			8			15		(7	)		32			31		1

Restaurant acquisitions/dispositions
	Company - Texas Roadhouse			0			1		(1	)		0			1		(1	)
	Company - Bubba's 33			0			0		0			0			0		0
	Company - Other			0			0		0			0			0		0
	Franchise - Texas Roadhouse			0			(1	)	1			0			(1	)	1
	Total			0			0		0			0			0		0

Restaurants open at the end of the quarter
	Company - Texas Roadhouse			392			368		24
	Company - Bubba's 33			7			3		4
	Company - Other			2			1		1
	Franchise - Texas Roadhouse			82			79		3
	Total			483			451		32

Company-owned restaurants
	Restaurant sales		$	450,529		$	400,790		12.4	%	$	1,791,446		$	1,568,556		14.2	%
	Store weeks			5,186			4,766		8.8	%		20,020			18,565		7.8	%
	Comparable restaurant sales growth (1)			4.5	%		7.0	%				7.2	%		4.7	%
	Texas Roadhouse restaurants only:
		Comparable restaurant sales growth (1)		4.5	%		7.0	%				7.2	%		4.7	%
		Average unit volume (2)	$	1,130		$	1,083		4.3	%	$	4,664		$	4,351		7.2	%
		Weekly sales by group:
		Comparable restaurants (352 units)	$	87,038
		Average unit volume restaurants (18 units) (3)	$	84,218
		Restaurants less than 6 months old (22 units)	$	94,410

Restaurant operating costs (as a % of restaurant sales)
Cost of sales				35.4	%		35.8	%	(47)bps			35.9	%		35.3	%	68bps
Labor				29.2	%		29.1	%	6bps			29.3	%		29.3	%	(1)bps
Rent				2.2	%		2.2	%	1bps			2.1	%		2.1	%	(4)bps
Other operating				15.7	%		16.4	%	(72)bps			15.4	%		15.7	%	(34)bps
Total				82.4	%		83.5	%	(112)bps			82.7	%		82.4	%	30bps

	Restaurant margin (4)			17.6	%		16.5	%	112bps			17.3	%		17.6	%	(30)bps

	Restaurant margin ($ in thousands)		$	79,196		$	65,982		20.0	%	$	310,762		$	276,782		12.3	%
	Restaurant margin $/Store week		$	15,272		$	13,844		10.3	%	$	15,523		$	14,909		4.1	%

Franchise-owned restaurants
	Franchise royalties and fees		$	3,822		$	3,635		5.1	%	$	15,922		$	13,592		17.1	%
	Store weeks			1,062			998		6.4	%		4,174			3,910		6.8	%
	Comparable restaurant sales growth (1)			4.0	%		5.7	%				6.5	%		4.9	%
	Average unit volume (2)		$	1,202		$	1,175		2.3	%	$	5,029		$	4,639		8.4	%

Pre-opening expense			$	4,640		$	5,775		(19.7	)%	$	19,116		$	18,452		3.6	%

Depreciation and amortization			$	18,700		$	15,497		20.7	%	$	69,694		$	59,179		17.8	%
	As a % of revenue			4.1	%		3.8	%	28bps			3.9	%		3.7	%	12bps

General and administrative expenses			$	24,992		$	20,676		20.9	%	$	92,336		$	81,656		13.1	%
	As a % of revenue			5.5	%		5.1	%	39bps			5.1	%		5.2	%	(5)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 sales from restaurants closed during the period.
(3) Average unit volume restaurants include Texas Roadhouse 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.

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Texas Roadhouse, Inc. Announces Fourth Quarter 2015 Results

Increases Quarterly Dividend 12% to $0.19 per Share

2016 Outlook

Cash Dividend Payment

Conference Call

About Texas Roadhouse

Forward-looking Statements

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Texas Roadhouse, Inc. Announces Fourth Quarter 2015 Results

Increases Quarterly Dividend 12% to $0.19 per Share

2016 Outlook

Cash Dividend Payment

Conference Call

About Texas Roadhouse

Forward-looking Statements

Comments:

Franchise News

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