Texas Roadhouse, Inc. Announces First Quarter 2016 Results

LOUISVILLE, Ky. - (BUSINESS WIRE) - May 2, 2016 - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 week period ended March 29, 2016.

        First Quarter
($000's)      

2016

   

2015

   

% Change

                     
Total revenue       $ 515,559     $ 460,230     12
Income from operations         52,811       48,600     9
Net income         35,593       32,292     10
Diluted EPS       $ 0.50     $ 0.46     10
 

Results for the first quarter included the following highlights:

  • Comparable restaurant sales growth of 4.6% at company restaurants and 3.1% at franchise restaurants;
  • Restaurant margin, as a percentage of restaurant sales, increased 116 basis points to 20.1%, primarily driven by lower food costs;
  • Diluted earnings per share increased 9.8% to $0.50 from $0.46 in the prior year;
  • The Company recorded a pre-tax charge of $5.5 million ($3.4 million after-tax) related to a pending legal settlement which had a $0.05impact on diluted earnings per share and a 10.0% impact on diluted earnings per share growth;
  • Seven company-owned restaurants were opened, including two Bubba’s 33 restaurants; and,
  • The Company repurchased 114,700 shares of its common stock for $4.1 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are pleased that our top-line momentum continued in the first quarter, driven by solid traffic growth. Strong comp sales, along with commodity deflation driven by lower beef costs helped us deliver near double digit earnings growth this quarter. As of today, we have opened ten company restaurants, as well as two international franchise openings, including our first in the Philippines. Beyond restaurant development, our balance sheet and cash flow remain healthy and we believe we are well-positioned for long-term growth."

2016 Outlook

The Company reported that comparable restaurant sales growth at company restaurants for the first four weeks of its second quarter of fiscal 2016 was approximately 5.1% compared to the prior year period.

Management reiterated the following expectations for 2016:

  • Positive comparable restaurant sales growth;
  • 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.

Conference Call

The Company is hosting a conference call today, May 2, 2016 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 675-4756 or (719) 325-4940 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 4379719 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 495 restaurants system-wide in 49 states and five 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
            March 29, 2016     March 31, 2015
                   
Revenue:              
  Restaurant sales       $ 511,284     $ 456,293
  Franchise royalties and fees         4,275       3,937
                   
Total revenue         515,559       460,230
                   
Costs and expenses:              
  Restaurant operating costs (excluding depreciation and amortization shown separately below):            
                   
    Cost of sales         173,128       159,980
    Labor         147,546       131,404
    Rent         10,027       8,979
    Other operating         77,612       69,317
  Pre-opening         4,825       3,818
  Depreciation and amortization         19,539       16,335
  Impairment and closure         11       -
  General and administrative         30,060       21,797
                   
Total costs and expenses         462,748       411,630
                   
Income from operations         52,811       48,600
                   
Interest expense, net         305       515

Equity income from investments in unconsolidated affiliates

        352       372
                   
Income before taxes         52,858       48,457
Provision for income taxes         15,857       14,876
                   
Net income including noncontrolling interests       $ 37,001     $ 33,581
Less: Net income attributable to noncontrolling interests         1,408       1,289
Net income attributable to Texas Roadhouse, Inc. and subsidiaries       $ 35,593     $ 32,292
                   

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

           
  Basic       $ 0.51     $ 0.46
  Diluted       $ 0.50     $ 0.46
                   
Weighted average shares outstanding:              
  Basic         70,169       69,841
  Diluted         70,764       70,528

 

   
   
   
   
   
   
   
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
               
        March 29, 2016   December 29, 2015
               
               
Cash and cash equivalents       $ 95,992     $ 59,334
Other current assets         51,218       74,479
Property and equipment, net         766,331       751,288
Goodwill         116,571       116,571
Intangible assets, net         4,488       4,827
Other assets         27,014       26,207
               
Total assets       $ 1,061,614     $ 1,032,706
               
               
Current maturities of long-term debt         147       144
Other current liabilities         233,097       256,498
Long-term debt, excluding current maturities         50,512       25,550
Other liabilities         78,566       73,332
Texas Roadhouse, Inc. and subsidiaries stockholders' equity         691,537       669,662
Noncontrolling interests         7,755       7,520
               
Total liabilities and equity       $ 1,061,614     $ 1,032,706

 

 
 
 
 
 
 
 
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                   
            13 Weeks Ended
            March 29, 2016     March 31, 2015
                   
                   
Cash flows from operating activities:              
Net income including noncontrolling interests       $ 37,001       $ 33,581  
Adjustments to reconcile net income to net cash provided by operating activities        
  Depreciation and amortization         19,539         16,335  
  Share-based compensation expense         5,788         4,904  
  Other noncash adjustments         802         (41 )
Change in working capital         1,758         2,913  
    Net cash provided by operating activities         64,888         57,692  
                   
Cash flows from investing activities:              
Capital expenditures - property and equipment         (34,179 )       (33,437 )
Proceeds from sale of property and equipment, including insurance proceeds         -         9  
    Net cash used in investing activities         (34,179 )       (33,428 )
                   
Cash flows from financing activities:              
Proceeds from revolving credit facility         25,000         -  
Repurchase shares of common stock         (4,110 )       -  
Dividends paid         (11,919 )       (10,443 )
Other financing activities         (3,022 )       (1,431 )
    Net cash provided by (used in) financing activities         5,949         (11,874 )
                   
    Net increase in cash and cash equivalents         36,658         12,390  
Cash and cash equivalents - beginning of period         59,334         86,122  
Cash and cash equivalents - end of period       $ 95,992       $ 98,512  

 

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

2016

   

2015

   

vs LY

                               
Restaurant openings                          
  Company - Texas Roadhouse         5         2       3    
  Company - Bubba's 33         2         1       1    
  Company - Other         0         0       0    
  Franchise - Texas Roadhouse         1         0       1    
  Total         8         3       5    
                               
Restaurants open at the end of the quarter                          
  Company - Texas Roadhouse         397         370       27    
  Company - Bubba's 33         9         4       5    
  Company - Other         2         1       1    
  Franchise - Texas Roadhouse         83         79       4    
  Total         491         454       37    
                               
Company-owned restaurants                          
  Restaurant sales       $ 511,284       $ 456,293       12.1

%

 

  Store weeks         5,262         4,857       8.3

%

 

  Comparable restaurant sales growth (1)         4.6 %       8.9 %        
  Texas Roadhouse restaurants only:                          
    Comparable restaurant sales growth (1)         4.6 %       8.8 %        
    Average unit volume (2)       $ 1,270       $ 1,220       4.1

%

 

    Weekly sales by group:                          
    Comparable restaurants (358 units)       $ 98,156                  
    Average unit volume restaurants (18 units) (3)       $ 88,094                  
    Restaurants less than 6 months old (21 units)       $ 98,583                  
                               
Restaurant operating costs (as a % of restaurant sales)                          
Cost of sales         33.9 %       35.1 %     (120 ) bps
Labor         28.9 %       28.8 %     6   bps
Rent         2.0 %       2.0 %     (1 ) bps
Other operating         15.2 %       15.2 %     (1 ) bps
Total         79.9 %       81.0 %     (116 ) bps
                               
  Restaurant margin (4)         20.1 %       19.0 %     116   bps
                               
  Restaurant margin ($ in thousands)       $ 102,970       $ 86,613       18.9

%

 

  Restaurant margin $/Store week       $ 19,569       $ 17,833       9.7

%

 

                               
Franchise-owned restaurants                          
  Franchise royalties and fees       $ 4,275       $ 3,937       8.6

%

 

  Store weeks         1,070         1,027       4.2

%

 

  Comparable restaurant sales growth (1)         3.1 %       8.0 %        
  Average unit volume (2)       $ 1,317       $ 1,306       0.8

%

 

                               
Pre-opening expense       $ 4,825       $ 3,818       26.4

%

 

                               
Depreciation and amortization       $ 19,539       $ 16,335       19.6

%

 

  As a % of revenue         3.8 %       3.5 %     24   bps
                               
General and administrative expenses       $ 30,060       $ 21,797       37.9

%

 

  As a % of revenue         5.8 %       4.7 %     109   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.
 

SOURCE Texas Roadhouse, Inc.

Contacts:

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

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

###

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