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Texas Roadhouse, Inc. Announces Third Quarter 2017 Results

By: Texas Roadhouse |  0 Shares     75 Reads

LOUISVILLE, Ky. - Oct. 30, 2017 // GLOBE NEWSWIRE // - Texas Roadhouse, Inc. (Nasdaq:TXRH), today announced financial results for the 13 and 39 week periods ended September 26, 2017.

		Third Quarter							Year to Date
($000's)			2017		2016	% Change				2017		2016	% Change
Total revenue		$	540,507	$	481,637	12.2	%		$	1,674,455	$	1,506,004	11.2	%
Income from operations			45,511		38,468	18.3	%			148,747		141,061	5.4	%
Net income			31,014		25,675	20.8	%			102,908		94,873	8.5	%
Diluted EPS		$	0.43	$	0.36	19.9	%		$	1.44	$	1.34	7.6	%

Results for the third quarter included the following highlights:

• Comparable restaurant sales increased 4.5% at company restaurants and 4.7% at domestic franchise restaurants;
• Restaurant margin, as a percentage of restaurant sales, decreased 31 basis points to 17.8%, primarily driven by wage rate inflation, partially offset by the benefit of lower food costs;
• Diluted earnings per share increased 19.9% to $0.43 from $0.36 in the prior year. This includes overlapping a pre-tax charge recorded in the prior year quarter of $1.2 million ($0.8 million after-tax) related to the settlement of a legal matter; and
• Seven company-owned restaurants, including two Bubba's 33 restaurants, and one franchise restaurant were opened.

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

• Comparable restaurant sales increased 4.0% at both company restaurants and domestic franchise restaurants;
• Restaurant margin, as a percentage of restaurant sales, decreased 28 basis points to 18.9%, primarily driven by wage rate inflation, partially offset by the benefit of lower food costs;
• A pre-tax charge of $14.9 million ($9.2 million after-tax), or $0.13 per diluted share, was recorded in the first quarter of 2017, related to the settlement of a legal matter. The impact of the legal charge was partially offset by a pre-tax charge recorded in 2016 of $6.7 million ($4.1 million after-tax) related to a separate legal matter which had an impact of $0.06 on diluted earnings per share;
• Diluted earnings per share increased 7.6% to $1.44 from $1.34 in the prior year; and
• 20 company-owned restaurants, including four Bubba’s 33 restaurants, and three franchise restaurants were opened.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are pleased to deliver another solid quarter of results including a 19.9% increase in diluted earnings per share driven by double-digit revenue growth. Comparable restaurant sales grew 4.5%, driven primarily by traffic gains of 3.5%. In addition, our positive sales momentum has continued into the fourth quarter. None of this growth would be possible without the commitment from our operators and everyone associated with our legendary brand."

Taylor continued, “As we look to 2018, our balance sheet and strong cashflow have us well positioned for continued growth including approximately 30 planned restaurant openings. In addition, our allocation strategy will continue to be focused on returning capital to shareholders, primarily through our dividend program.”

2017 Outlook

Comparable restaurant sales at company restaurants for the first four weeks of our fourth quarter of fiscal 2017 increased approximately 5.3% compared to the prior year period.

Management updated the following expectations for 2017:

• 26 or 27 company restaurant openings (compared to previous guidance of 27 to 29 company restaurant openings), including four Bubba’s 33 restaurants;
• Food cost deflation of approximately 2.0%, compared to previous guidance of approximately 1.0% to 2.0%; and
• Labor inflation of approximately 7.0% to 8.0%, compared to previous guidance of mid-single digit inflation.

Management reiterated the following expectations for 2017:

• Positive comparable restaurant sales growth;
• An income tax rate of approximately 28.0%; and
• Total capital expenditures of approximately $170.0 million, excluding any cash used for franchise acquisitions.

2018 Outlook

Management provided the following initial expectations for 2018:

• Positive comparable restaurant sales growth;
• Approximately 30 company restaurant openings, including up to seven Bubba’s 33 restaurants;
• Relatively flat food costs;
• Mid-single digit labor inflation;
• An income tax rate of between 28.0% and 29.0%; and
• Total capital expenditures of approximately $175.0 million, excluding any cash used for franchise acquisitions.

Conference Call

The Company is hosting a conference call today, October 30, 2017 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (888) 297-0358 or (719) 325-2396 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (844) 512-2921 or (412) 317-6671 for international calls, and use 1901754 as the pass code. There will be a simultaneous Web cast conducted at www.texasroadhouse.com.

About the Company

Texas Roadhouse is a casual dining concept that first opened in 1993 and today has grown to over 540 restaurants system-wide in 49 states and six 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.

Contacts:

Tonya Robinson
Investor Relations
(502) 515-7269

Travis Doster
Media Relations
(502) 638-5457

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
			13 Weeks Ended									39 Weeks Ended
			September 26, 2017					September 27, 2016				September 26, 2017					September 27, 2016
Revenue:
	Restaurant sales		$	536,341				$	477,617			$	1,661,821				$	1,493,531
	Franchise royalties and fees			4,166					4,020				12,634					12,473
Total revenue				540,507					481,637				1,674,455					1,506,004
Costs and expenses:
	Restaurant operating costs (excluding depreciation and amortization shown separately below):
		Cost of sales		176,498					161,886				545,862					506,565
		Labor		169,355					145,301				514,287					442,861
		Rent		11,257					10,266				33,238					30,477
		Other operating		83,679					73,583				254,176					227,082
	Pre-opening			4,548					5,017				14,302					14,253
	Depreciation and amortization			23,534					20,941				69,236					60,718
	Impairment and closure			2					13				13					54
	General and administrative			26,123					26,162				94,594					82,933
Total costs and expenses				494,996					443,169				1,525,708					1,364,943
Income from operations				45,511					38,468				148,747					141,061
Interest expense, net				500					288				1,211					902
Equity income from investments in
	unconsolidated affiliates			(359	)				(4	)			(1,149	)				(831	)
Income before taxes				45,370					38,184				148,685					140,990
Provision for income taxes				13,046					11,381				41,159					42,325
Net income including noncontrolling interests				32,324					26,803				107,526					98,665
Less: Net income attributable to noncontrolling interests				1,310					1,128				4,618					3,792
Net income attributable to Texas Roadhouse, Inc. and subsidiaries			$	31,014				$	25,675			$	102,908				$	94,873
Net income per common share attributable to Texas Roadhouse, Inc.
and subsidiaries:
	Basic		$	0.44				$	0.36			$	1.45				$	1.35
	Diluted		$	0.43				$	0.36			$	1.44				$	1.34
Weighted average shares outstanding:
	Basic			71,067					70,477				70,939					70,338
	Diluted			71,532					70,981				71,449					70,898
Cash dividends declared per share			$	0.21				$	0.19			$	0.63				$	0.57

 

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
				September 26, 2017				December 27, 2016
	Cash and cash equivalents			$	114,436			$	112,944
	Other current assets				50,893				87,315
	Property and equipment, net				886,972				830,054
	Goodwill				121,040				116,571
	Intangible assets, net				2,930				3,622
	Other assets				36,448				29,465
	Total assets			$	1,212,719			$	1,179,971
	Current maturities of long-term debt and obligation under capital lease				9				167
	Other current liabilities				238,260				279,360
	Long-term debt and obligation under capital lease, excluding current maturities				51,984				52,381
	Other liabilities				91,674				89,821
	Texas Roadhouse, Inc. and subsidiaries stockholders' equity				818,743				750,226
	Noncontrolling interests				12,049				8,016
	Total liabilities and equity			$	1,212,719			$	1,179,971

 

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
				39 Weeks Ended
				September 26, 2017					September 27, 2016
Cash flows from operating activities:
Net income including noncontrolling interests				$	107,526				$	98,665
Adjustments to reconcile net income to net cash provided by operating activities
	Depreciation and amortization				69,236					60,718
	Share-based compensation expense				18,826					18,347
	Other noncash adjustments				(2,702	)				1,321
Change in working capital					(4,816	)				(19,269	)
		Net cash provided by operating activities			188,070					159,782
Cash flows from investing activities:
Capital expenditures - property and equipment					(117,037	)				(113,219	)
Acquisition of franchise restaurants, net of cash acquired					(16,528	)				-
		Net cash used in investing activities			(133,565	)				(113,219	)
Cash flows from financing activities:
Proceeds from revolving credit facility, net					-					25,000
Repurchase shares of common stock					-					(4,110	)
Dividends paid					(43,223	)				(38,656	)
Other financing activities					(9,790	)				(6,418	)
		Net cash used in financing activities			(53,013	)				(24,184	)
		Net increase in cash and cash equivalents			1,492					22,379
Cash and cash equivalents - beginning of period					112,944					59,334
Cash and cash equivalents - end of period				$	114,436				$	81,713

For full wide spreadsheet, please go to: http://phoenix.corporate-ir.net/phoenix.zhtml?c=179897&p=irol-newsArticle&ID=2312561 

SOURCE Texas Roadhouse

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