Exhibit 99.1
Texas Roadhouse, Inc. Announces Second Quarter 2008 Results
LOUISVILLE, Ky (July 28, 2008) – Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 24, 2008.
|
| Second Quarter |
| Year to Date |
| ||||||||||||
($000’s) |
| 2008 |
| 2007 |
| % Change |
| 2008 |
| 2007 |
| % Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total revenue |
| 217,311 |
| 180,986 |
| 20 |
| 428,524 |
| 359,323 |
| 19 |
| ||||
Income from operations |
| 17,040 |
| 14,902 |
| 14 |
| 37,740 |
| 34,602 |
| 9 |
| ||||
Net income |
| 10,472 |
| 9,257 |
| 13 |
| 23,385 |
| 21,553 |
| 8 |
| ||||
Diluted EPS |
| $ | 0.14 |
| $ | 0.12 |
| 14 |
| $ | 0.31 |
| $ | 0.28 |
| 9 |
|
Results for the quarter:
· Comparable restaurant sales decreased 0.3% at company restaurants and 2.3% at franchise restaurants;
· 10 company restaurants opened;
· Three restaurants were acquired from franchisees;
· The Company repurchased 1,094,300 shares of its Class A common stock for a total purchase price of $10.2 million; and
· Diluted earnings per share increased 14.0% to $0.14 from $0.12 in the prior year period.
Results year-to-date:
· Comparable restaurant sales decreased 0.7% at company restaurants and 2.5% at franchise restaurants;
· 16 company restaurants opened while one company restaurant closed;
· Three restaurants were acquired from franchisees;
· The Company repurchased 1,624,200 shares of its Class A common stock for a total purchase price of $15.1 million; and
· Diluted earnings per share increased 9.0% to $0.31 from $0.28 in the prior year period.
G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, “Our second quarter results were respectable, and while the overall consumer and inflationary environments have remained challenging, our operators continue to be focused on doing the right things for the long-term success of the business. In addition, we continue to allocate our capital in a way that we believe creates long-term value for our stockholders through a combination of new restaurant development, share repurchases and franchise acquisitions.”
Stock Repurchase Authorization
On July 8, 2008, the Board of Directors approved a $50.0 million increase in the Company’s stock repurchase program. The Company’s total stock repurchase authorization is now $75.0 million. Under the stock repurchase program, the Company may repurchase outstanding shares from time to time in open market transactions until February 14, 2010, in accordance with applicable laws, rules and regulations. The
timing and the amount of any repurchases will be determined by the Company’s management under parameters established by the Board of Directors, based on its evaluation of the Company’s stock price, market conditions and other corporate considerations. The Company intends to use cash on hand and funds available under its credit facility to repurchase shares under the program.
Franchise Acquisitions
As previously announced, effective as of the first day of the Company’s second quarter of fiscal 2008, the Company acquired three franchise restaurants. The aggregate purchase price for the restaurants, which included two in Missouri and one in Kentucky, was approximately $8.7 million. The purchase price was paid in cash, funded through borrowings under the Company’s credit facility. On a 12-month basis, the acquisitions are expected to add approximately $13.0 million of net revenue and approximately $0.005 per diluted share to earnings, excluding an estimated $35,000 after-tax, acquisition-related charge recorded during the second quarter of fiscal 2008.
On July 23, 2008, the Company acquired eight franchise restaurants. The aggregate purchase price for the restaurants, all in Tennessee, was approximately $9.3 million. The purchase price was paid in cash, funded through borrowings under the Company’s credit facility. On a 12-month basis, the acquisitions are expected to add approximately $28.5 million of net revenue and to have no significant accretive impact, excluding an estimated $0.1 million after-tax, acquisition-related charge to be recorded during the third quarter of fiscal 2008.
Outlook for 2008
The Company reported that comparable restaurant sales for the first four weeks of the third quarter of fiscal 2008 decreased approximately 3.0% compared to the same period of the prior year.
The Company is currently estimating diluted earnings per share growth of 5 to 15% for fiscal 2008. This includes an estimated $0.01 to $0.02 positive per share impact, or 2 to 4% of diluted earnings per share, resulting from the addition of the 53rd week in the fiscal year. As such, the fourth quarter of fiscal 2008 will contain 14 weeks versus 13 weeks in fiscal 2007.
This estimate is based, in part, on the following assumptions:
· New company-owned restaurant openings of approximately 30;
· Comparable restaurant sales growth of negative 1.0% to flat; and
· Restaurant operating costs increasing 80 to 120 basis points as compared to full year 2007.
Conference Call
The Company is hosting a conference call today, July 28, 2008, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (888) 668-1645. A replay of the call will be available for one week following the conference call. To access the replay, please dial (888) 203-1112, and use 2427920 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 operates over 300 restaurants system-wide in 44 states. 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 for the full year 2008, 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 during full year 2008, the sales at these and our other company-owned and franchise restaurants, our ability to control restaurant operating costs, our ability to integrate the franchise restaurants which we have acquired, strength of consumer spending and other factors disclosed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission. Investors should take such risks into account when making investment decisions. Stockholders 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. The Company undertakes no obligation to update any forward-looking statements.
# # #
Contacts:
Investor Relations
Scott Colosi
502-515-7300
Media
Travis Doster
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 24, 2008 |
| June 26, 2007 |
| June 24, 2008 |
| June 26, 2007 |
| ||||
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Revenue: |
|
|
|
|
|
|
|
|
| ||||
Restaurant sales |
| $ | 214,787 |
| $ | 178,129 |
| $ | 423,388 |
| $ | 353,573 |
|
Franchise royalties and fees |
| 2,524 |
| 2,857 |
| 5,136 |
| 5,750 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total revenue |
| 217,311 |
| 180,986 |
| 428,524 |
| 359,323 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Costs and expenses: |
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|
|
|
|
|
|
|
| ||||
Restaurant operating costs: |
|
|
|
|
|
|
|
|
| ||||
Cost of sales |
| 74,774 |
| 62,250 |
| 148,360 |
| 123,347 |
| ||||
Labor |
| 61,804 |
| 50,282 |
| 120,246 |
| 98,579 |
| ||||
Rent |
| 3,601 |
| 2,846 |
| 6,890 |
| 5,631 |
| ||||
Other operating |
| 35,346 |
| 28,774 |
| 68,596 |
| 56,667 |
| ||||
Pre-opening |
| 3,212 |
| 3,102 |
| 6,038 |
| 6,685 |
| ||||
Depreciation and amortization |
| 9,066 |
| 7,230 |
| 17,612 |
| 13,875 |
| ||||
Impairment and closure |
| 31 |
| — |
| 734 |
| — |
| ||||
General and administrative |
| 12,437 |
| 11,600 |
| 22,308 |
| 19,937 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total costs and expenses |
| 200,271 |
| 166,084 |
| 390,784 |
| 324,721 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from operations |
| 17,040 |
| 14,902 |
| 37,740 |
| 34,602 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest expense, net |
| 720 |
| 361 |
| 1,362 |
| 597 |
| ||||
Minority interest |
| 279 |
| 230 |
| 540 |
| 519 |
| ||||
Equity income from investments in unconsolidated affiliates |
| 70 |
| 93 |
| 139 |
| 190 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before taxes |
| 16,111 |
| 14,404 |
| 35,977 |
| 33,676 |
| ||||
Provision for income taxes |
| 5,639 |
| 5,147 |
| 12,592 |
| 12,123 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 10,472 |
| $ | 9,257 |
| $ | 23,385 |
| $ | 21,553 |
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|
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| ||||
Net income per common share: |
|
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|
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Basic |
| $ | 0.14 |
| $ | 0.12 |
| $ | 0.31 |
| $ | 0.29 |
|
Diluted |
| $ | 0.14 |
| $ | 0.12 |
| $ | 0.31 |
| $ | 0.28 |
|
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Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 74,252 |
| 74,613 |
| 74,498 |
| 74,500 |
| ||||
Diluted |
| 75,996 |
| 76,912 |
| 76,220 |
| 76,879 |
|
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
|
| June 24, 2008 |
| June 26, 2007 |
| ||
|
|
|
|
|
| ||
Cash |
| $ | 7,071 |
| $ | 57,791 |
|
Other current assets |
| 21,952 |
| 17,549 |
| ||
Property and equipment, net |
| 425,997 |
| 340,353 |
| ||
Goodwill |
| 108,153 |
| 86,649 |
| ||
Intangible asset, net |
| 9,610 |
| 4,702 |
| ||
Other assets |
| 4,012 |
| 3,105 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 576,795 |
| $ | 510,149 |
|
|
|
|
|
|
| ||
Current maturities of long-term debt and obligations under capital leases |
| $ | 236 |
| $ | 288 |
|
Other current liabilities |
| 77,267 |
| 61,935 |
| ||
Long-term debt and obligations under capital leases, excluding current maturities |
| 93,592 |
| 79,637 |
| ||
Other liabilities |
| 22,433 |
| 20,393 |
| ||
Minority interest |
| 3,144 |
| 1,612 |
| ||
Stockholders’ equity |
| 380,123 |
| 346,284 |
| ||
|
|
|
|
|
| ||
Total liabilities and stockholders’ equity |
| $ | 576,795 |
| $ | 510,149 |
|
Supplemental Financial and Operating Information
($ amounts in thousands)
(unaudited)
|
| Second Quarter |
| Change |
| Year to Date |
| Change |
| ||||||||
|
| 2008 |
| 2007 |
| vs LY |
| 2008 |
| 2007 |
| vs LY |
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Restaurant openings |
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Company |
| 10 |
| 7 |
| 3 |
| 16 |
| 17 |
| (1 | ) | ||||
Franchise |
| 0 |
| 2 |
| (2 | ) | 0 |
| 2 |
| (2 | ) | ||||
Total |
| 10 |
| 9 |
| 1 |
| 16 |
| 19 |
| (3 | ) | ||||
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Restaurant acquisitions |
|
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Company |
| 3 |
| 0 |
| 3 |
| 3 |
| 0 |
| 3 |
| ||||
Franchise |
| (3 | ) | 0 |
| (3 | ) | (3 | ) | 0 |
| (3 | ) | ||||
Total |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| ||||
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Restaurant closures |
|
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Company |
| 0 |
| 0 |
| 0 |
| (1 | ) | 0 |
| (1 | ) | ||||
Franchise |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| ||||
Total |
| 0 |
| 0 |
| 0 |
| (1 | ) | 0 |
| (1 | ) | ||||
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|
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Restaurants open at the end of the quarter |
|
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|
|
|
|
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Company |
| 222 |
| 180 |
| 42 |
|
|
|
|
|
|
| ||||
Franchise |
| 78 |
| 90 |
| (12 | ) |
|
|
|
|
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Total |
| 300 |
| 270 |
| 30 |
|
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Company-owned restaurants |
|
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Restaurant sales |
| $ | 214,787 |
| $ | 178,129 |
| 20.6 | % | $ | 423,388 |
| $ | 353,573 |
| 19.7 | % |
Store weeks |
| 2,805 |
| 2,278 |
| 23.1 | % | 5,472 |
| 4,439 |
| 23.3 | % | ||||
Comparable restaurant sales growth (1) |
| (0.3 | )% | 1.9 | % |
|
| (0.7 | )% | 1.5 | % |
|
| ||||
Average unit volume (2) |
| $ | 995 |
| $ | 1,012 |
| (1.7 | )% | $ | 2,017 |
| $ | 2,063 |
| (2.2 | )% |
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Restaurant costs (as a % of restaurant sales) |
|
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Cost of sales |
| 34.8 | % | 34.9 | % | (13 | )bps | 35.0 | % | 34.9 | % | 16 | bps | ||||
Labor |
| 28.8 | % | 28.2 | % | 55 | bps | 28.4 | % | 27.9 | % | 52 | bps | ||||
Rent |
| 1.7 | % | 1.6 | % | 8 | bps | 1.6 | % | 1.6 | % | 3 | bps | ||||
Other operating |
| 16.5 | % | 16.2 | % | 30 | bps | 16.2 | % | 16.0 | % | 17 | bps | ||||
Total |
| 81.7 | % | 80.9 | % | 79 | bps | 81.3 | % | 80.4 | % | 88 | bps | ||||
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Franchise-owned restaurants |
|
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Franchise royalties and fees |
| $ | 2,524 |
| $ | 2,857 |
| (11.7 | )% | $ | 5,136 |
| $ | 5,750 |
| (10.7 | )% |
Store weeks |
| 1,014 |
| 1,151 |
| (11.9 | )% | 2,067 |
| 2,295 |
| (9.9 | )% | ||||
Comparable restaurant sales growth (1) |
| (2.3 | )% | 1.8 | % |
|
| (2.5 | )% | 1.1 | % |
|
| ||||
Average unit volume (2) |
| $ | 944 |
| $ | 968 |
| (2.5 | )% | $ | 1,904 |
| $ | 1,950 |
| (2.4 | )% |
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Pre-opening expense |
| $ | 3,212 |
| $ | 3,102 |
| 3.5 | % | $ | 6,038 |
| $ | 6,685 |
| (9.7 | )% |
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Depreciation and amortization |
| $ | 9,066 |
| $ | 7,230 |
| 25.4 | % | $ | 17,612 |
| $ | 13,875 |
| 26.9 | % |
As a % of revenue |
| 4.2 | % | 4.0 | % | 18 | bps | 4.1 | % | 3.9 | % | 25 | bps | ||||
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General and administrative expenses |
| $ | 12,437 |
| $ | 11,600 |
| 7.2 | % | $ | 22,308 |
| $ | 19,937 |
| 11.9 | % |
As a % of revenue |
| 5.7 | % | 6.4 | % | (69 | )bps | 5.2 | % | 5.5 | % | (34 | )bps |
(1) Comparable restaurant sales growth includes sales from restaurants open 18 months as of the beginning of the measurement period.
(2) Average unit volume includes sales from restaurants open six months as of the beginning of the measurement period. For comparative purposes, average unit volume for Q2 2007 and 2007 YTD were adjusted to reflect restaurant sales of the 12 acquired fr
NM - - not meaningful
Amounts may not foot due to rounding.