• Home:
• News:
• Texas Roadhouse:

Texas Roadhouse, Inc. Announces Second Quarter 2018 Results

By: Texas Roadhouse |  0 Shares     93 Reads

LOUISVILLE, Ky. - July 30, 2018 // GLOBE NEWSWIRE // - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 26, 2018.

Second Quarter   Year to Date ($000's)   2018 2017 % Change   2018 2017 % Change                   Total revenue   $ 629,237   $ 566,262   11.1%   $ 1,256,942   $ 1,133,948   10.8% Income from operations     54,267     54,214   0.1%     119,138     103,236   15.4% Net income     44,227     37,581   17.7%     98,768     71,894   37.4% Diluted EPS   $ 0.62   $ 0.53   16.9%   $ 1.37   $ 1.01   36.5%

Results for the second quarter included the following highlights:

• Comparable restaurant sales increased 5.7% at company restaurants and 3.9% at domestic franchise restaurants;
• Diluted earnings per share increased 16.9% to $0.62 from $0.53 in the prior year;
• Restaurant margin dollars increased 6.5% to $113.4 million from $106.5 million in the prior year, and restaurant margin, as a percentage of restaurant and other sales, decreased 77 basis points to 18.2% primarily due to higher labor costs;
• General and administrative expenses increased primarily due to higher costs of $2.5 million associated with our annual managing partner conference, which marked our 25th anniversary;
• Our income tax rate decreased to 15.6% from 27.9% in the prior year period primarily due to the impact of new tax legislation; and
• Seven company restaurants, including three Bubba's 33 restaurants, and one international franchise restaurant were opened.

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

• Comparable restaurant sales increased 5.3% at company restaurants and 4.0% at domestic franchise restaurants;
• Diluted earnings per share increased 36.5% to $1.37 from $1.01 in the prior year;
• Restaurant margin dollars increased 6.4% to $232.8 million from $218.7 million in the prior year, and restaurant margin, as a percentage of restaurant and other sales, decreased 76 basis points to 18.7% primarily due to higher labor costs;
• General and administrative expenses decreased primarily due to a pre-tax charge of $14.9 million ($9.2 million after-tax), or $0.13 per diluted share, recorded in the first quarter of 2017, related to the settlement of a legal matter, which was partially offset by higher costs associated with our annual managing partner conference in 2018;
• Our income tax rate decreased to 14.2% from 27.2% in the prior year period primarily due to the impact of new tax legislation; and
• 14 company restaurants, including four Bubba's 33 restaurants, and three international franchise restaurants were opened.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "Our top-line results for the second quarter were strong with double-digit revenue growth, including 5.7% comparable restaurant sales growth. We are pleased with the consistency of our traffic gains this year and the continued strength headed into the third quarter."

Taylor continued, "On the development front, with 14 company restaurants opened in the first half of 2018, we are on track to open 27 or 28 restaurants for the year. We continue to fund our new restaurant growth through internal cash flow, while also returning excess capital to our shareholders through dividends, further driving shareholder value."

2018 Outlook

Comparable restaurant sales at company restaurants for the first four weeks of our third quarter of fiscal 2018 increased approximately 4.7% compared to the prior year period.

Management updated the following expectations for 2018:

• 27 or 28 company restaurant openings, including up to five Bubba's 33 restaurants; and
• An income tax rate of 14.0% to 15.0%.
• Management reiterated the following expectations for 2018:
• Positive comparable restaurant sales growth;
• Commodity cost inflation of approximately 1.0%;
• Mid-single digit growth in labor dollars per store week, excluding the impact of higher guest counts; and
• Total capital expenditures of approximately $165.0 million to $175.0 million.

Non-GAAP Measures

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"). Within our press release, we make reference to restaurant margin (in dollars and as a percentage of sales). Restaurant margin represents restaurant and other sales less restaurant-level operating costs, including cost of sales, labor, rent and other operating costs. Restaurant margin should not be considered in isolation, or as an alternative, to income from operations. This non-GAAP measure is not indicative of overall company performance and profitability in that this measure does not accrue directly to the benefit of shareholders due to the nature of the costs excluded. Restaurant margin is widely regarded as a useful metric by which to evaluate restaurant-level operating efficiency and performance. In calculating restaurant margin, we exclude certain non-restaurant-level costs that support operations, including pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. We also exclude depreciation and amortization expense, substantially all of which relates to restaurant-level assets, as it represents a non-cash charge for the investment in our restaurants. We also exclude impairment and closure expense, as we believe this provides a clearer perspective of ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in our industry. A reconciliation of income from operations to restaurant margin is included in the accompanying financial tables.

Conference Call

Texas Roadhouse is hosting a conference call today, July 30, 2018 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (866) 548-4713 or (323) 794-2093 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 2736628 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 565 restaurants system-wide in 49 states and eight 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 Texas Roadhouse. 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
(502) 638-5457

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
			13 Weeks Ended									26 Weeks Ended
			June 26, 2018					June 27, 2017				June 26, 2018					June 27, 2017
Revenue:
	Restaurant and other sales		$	624,073				$	562,160			$	1,246,475				$	1,125,480
	Franchise royalties and fees			5,164					4,102				10,467					8,468
Total revenue				629,237					566,262				1,256,942					1,133,948
Costs and expenses:
	Restaurant operating costs (excluding depreciation and amortization shown separately below):
		Cost of sales		204,048					185,171				406,834					369,364
		Labor		199,647					174,585				395,677					344,932
		Rent		12,119					11,112				23,970					21,981
		Other operating		94,858					84,837				187,236					170,497
	Pre-opening			4,107					5,014				9,151					9,754
	Depreciation and amortization			25,165					23,106				49,649					45,702
	Impairment and closure			22					-				108					11
	General and administrative			35,004					28,223				65,179					68,471
Total costs and expenses				574,970					512,048				1,137,804					1,030,712
Income from operations				54,267					54,214				119,138					103,236
Interest expense, net				283					379				642					711
Equity income from investments in
	unconsolidated affiliates			(445	)				(470	)			(769	)				(790	)
Income before taxes				54,429					54,305				119,265					103,315
Provision for income taxes				8,466					15,126				16,923					28,113
Net income including noncontrolling interests				45,963					39,179				102,342					75,202
Less: Net income attributable to noncontrolling interests				1,736					1,598				3,574					3,308
Net income attributable to Texas Roadhouse, Inc. and subsidiaries			$	44,227				$	37,581			$	98,768				$	71,894
Net income per common share attributable to Texas Roadhouse, Inc.
and subsidiaries:
	Basic		$	0.62				$	0.53			$	1.38				$	1.01
	Diluted		$	0.62				$	0.53			$	1.37				$	1.01
Weighted average shares outstanding:
	Basic			71,445					70,973				71,389					70,876
	Diluted			71,897					71,437				71,853					71,398
Cash dividends declared per share			$	0.25				$	0.21			$	0.50				$	0.42

 

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
			June 26, 2018				December 26, 2017
Cash and cash equivalents			$	154,353			$	150,918
Other current assets, net				62,446				106,163
Property and equipment, net				928,765				912,147
Goodwill				121,040				121,040
Intangible assets, net				2,329				2,700
Other assets				42,660				37,655
Total assets			$	1,311,593			$	1,330,623
Current maturities of long-term debt and obligation under capital lease				10				9
Other current liabilities				280,382				329,989
Long-term debt and obligation under capital lease, excluding current maturities				1,976				51,981
Other liabilities, net				107,627				97,253
Texas Roadhouse, Inc. and subsidiaries stockholders' equity				908,049				839,079
Noncontrolling interests				13,549				12,312
Total liabilities and equity			$	1,311,593			$	1,330,623

 

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
				26 Weeks Ended
				June 26, 2018					June 27, 2017
Cash flows from operating activities:
Net income including noncontrolling interests				$	102,342				$	75,202
Adjustments to reconcile net income to net cash provided by operating activities
	Depreciation and amortization				49,649					45,702
	Share-based compensation expense				15,856					12,365
	Other noncash adjustments, net				7,076					(1,842	)
Change in working capital					(9,816	)				(3,119	)
		Net cash provided by operating activities			165,107					128,308
Cash flows from investing activities:
Capital expenditures - property and equipment					(66,718	)				(73,637	)
Acquisition of franchise restaurants, net of cash acquired					-					(16,528	)
		Net cash used in investing activities			(66,718	)				(90,165	)
Cash flows from financing activities:
Principal payments on long-term debt and capital lease obligation					(50,004	)				(81	)
Dividends paid					(32,798	)				(28,308	)
Other financing activities, net					(12,152	)				(6,190	)
		Net cash used in financing activities			(94,954	)				(34,579	)
		Net increase in cash and cash equivalents			3,435					3,564
Cash and cash equivalents - beginning of period					150,918					112,944
Cash and cash equivalents - end of period				$	154,353				$	116,508

 

Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of Income from Operations to Restaurant Margin
(in thousands)
(unaudited)
		13 Weeks Ended								26 Weeks Ended
		June 26, 2018				June 27, 2017				June 26, 2018				June 27, 2017
Income from operations		$	54,267			$	54,214			$	119,138			$	103,236
Less:
Franchise royalties and fees			5,164				4,102				10,467				8,468
Add:
Pre-opening			4,107				5,014				9,151				9,754
Depreciation and amortization			25,165				23,106				49,649				45,702
Impairment and closure			22				-				108				11
General and administrative			35,004				28,223				65,179				68,471
Restaurant margin		$	113,401			$	106,455			$	232,758			$	218,706
Restaurant margin (as a percentage of restaurant and other sales)			18.2	%			18.9	%			18.7	%			19.4	%

 

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
			2018			2017			vs LY			2018			2017				vs LY
Restaurant openings
	Company - Texas Roadhouse		4			5			(1)			10			11				(1)
	Company - Bubba's 33		3			2			1			4			2				2
	Company - Other		0			0			0			0			0				0
	Franchise - Texas Roadhouse - U.S.		0			0			0			0			1				(1)
	Franchise - Texas Roadhouse - International		1			0			1			3			1				2
	Total		8			7			1			17			15				2
Restaurant acquisitions/dispositions
	Company - Texas Roadhouse		0			0			0			0			4				(4)
	Franchise - Texas Roadhouse		0			0			0			0			(4)				4
	Total		0			0			0			0			0				0
Restaurants open at the end of the quarter
	Company - Texas Roadhouse		450			428			22
	Company - Bubba's 33		24			18			6
	Company - Other		2			2			0
	Franchise - Texas Roadhouse - U.S.		70			70			0
	Franchise - Texas Roadhouse - International		20			14			6
	Total		566			532			34
Company restaurants
	Restaurant and other sales		$	624,073		$	562,160		11.0			$	1,246,475		$	1,125,480			10.8		%
	Store weeks			6,142			5,775		6.4				12,190			11,456			6.4		%
	Comparable restaurant sales growth (1)			5.7	%		4.0	%					5.3	%		3.6	%
	Texas Roadhouse restaurants only:
		Comparable restaurant sales growth (1)		5.6	%		4.1	%					5.2	%		3.7	%
		Average unit volume (2)	$	1,338		$	1,274		5.0			$	2,696		$	2,575			4.7		%
		Weekly sales by group:
		Comparable restaurants (412 units)	$	103,464
		Average unit volume restaurants (21 units) (3)	$	91,973
		Restaurants less than 6 months old (17 units)	$	105,386
Restaurant operating costs (as a % of restaurant and other sales)
Cost of sales				32.7	%		32.9	%	(24)	bps			32.6	%		32.8	%		(18)		bps
Labor				32.0	%		31.1	%	93	bps			31.7	%		30.6	%		110		bps
Rent				1.9	%		2.0	%	(3)	bps			1.9	%		2.0	%		(3)		bps
Other operating				15.2	%		15.1	%	11	bps			15.0	%		15.1	%		(13)		bps
Total				81.8	%		81.1	%	77	bps			81.3	%		80.6	%		76		bps
	Restaurant margin			18.2	%		18.9	%	(77)	bps			18.7	%		19.4	%		(76)		bps
	Restaurant margin ($ in thousands)		$	113,401		$	106,455		6.5	%		$	232,758		$	218,706			6.4		%
	Restaurant margin $/Store week		$	18,463		$	18,434		0.2	%		$	19,094		$	19,091			0.0		%
Franchise restaurants
	Franchise royalties and fees		$	5,164		$	4,102		25.9	%		$	10,467		$	8,468			23.6		%
	Store weeks			1,164			1,092		6.6	%			2,303			2,172			6.1		%
	Comparable restaurant sales growth (1)			1.9	%		2.9	%					1.9	%		3.0	%
	U.S. franchise restaurants only:
		Comparable restaurant sales growth (1)		3.9	%		3.6	%					4.0	%		3.8	%
		Average unit volume (2)	$	1,373		$	1,321		4.0	%		$	2,771		$	2,644			4.8		%
Pre-opening expense			$	4,107		$	5,014		(18.1)	%		$	9,151		$	9,754			(6.2)		%
Depreciation and amortization			$	25,165		$	23,106		8.9	%		$	49,649		$	45,702			8.6		%
	As a % of revenue			4.0	%		4.1	%	(8)	bps			3.9	%		4.0	%		(8)		bps
General and administrative expenses			$	35,004		$	28,223		24.0	%		$	65,179		$	68,471			(4.8)		%
	As a % of revenue			5.6	%		5.0	%	58	bps			5.2	%		6.0	%		(85)		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 and up to 18 months before the beginning of the period measured.

Amounts may not foot due to rounding.

SOURCE Texas Roadhouse, Inc

###

Comments:

comments powered by Disqus