Exhibit 99.1
Texas Roadhouse, Inc. Announces Third Quarter 2010 Results
LOUISVILLE, Ky (November 1, 2010) — Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 week periods ended September 28, 2010.
|
| Third Quarter |
| Year to Date |
| ||||||||||||
($000’s) |
| 2010 |
| 2009 |
| % Change |
| 2010 |
| 2009 |
| % Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total revenue |
| 245,613 |
| 226,467 |
| 8 |
| 760,399 |
| 714,963 |
| 6 |
| ||||
Income from operations |
| 21,448 |
| 17,281 |
| 24 |
| 74,883 |
| 61,058 |
| 23 |
| ||||
Net income |
| 13,952 |
| 10,695 |
| 30 |
| 48,229 |
| 38,770 |
| 24 |
| ||||
Diluted EPS |
| $ | 0.19 |
| $ | 0.15 |
| 28 |
| $ | 0.66 |
| $ | 0.54 |
| 22 |
|
Results for the quarter included:
· Comparable restaurant sales increased 4.3% at company restaurants and 4.4% at franchise restaurants;
· Three company restaurants opened;
· Restaurant margins increased 79 basis points to 17.9%;
· Diluted earnings per share increased 28% to $0.19 from $0.15 in the prior year period.
Results year-to-date included:
· Comparable restaurant sales increased 2.1% at company restaurants and 2.4% at franchise restaurants;
· Seven company restaurants and one franchise restaurant opened, while one company restaurant closed;
· Restaurant margins increased 114 basis points to 19.0%;
· Diluted earnings per share increased 22% to $0.66 from $0.54 in the prior year-to-date period.
G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, “We are very encouraged by our third quarter results, which have helped position Texas Roadhouse to end 2010 at the high end of our previously expected diluted EPS range. Comparable restaurant sales growth was over 4% for the quarter, driven by traffic gains, which in turn led to continued margin expansion and net income growth. Importantly, our strong performance was achieved without compromising our commitment to legendary food and service, as our adherence to these core values continues to benefit our business in a tough economy.” Hart continued, “Looking ahead, we are excited to increase our development plans for 2011. Along with continued execution at the store level, we believe this reacceleration of our expansion efforts will position Texas Roadhouse to continue driving long-term value for shareholders.”
Outlook for 2010
The Company reported that comparable restaurant sales for the first four weeks of the fourth quarter of fiscal 2010 increased 3.5% compared to the prior year period.
The Company now estimates 2010 diluted earnings per share growth will be approximately 20% compared to 2009, which is at the high-end of the previous 16% to 20% range. This revised estimate is based, in part, on the following assumptions:
· Comparable restaurant sales growth of approximately 2.0%;
· 14 company restaurant openings;
· Food cost deflation of approximately 2.5%; and
· Total capital expenditures of approximately $50 million.
Outlook for 2011
While the Company is still finalizing its plans relating to 2011, the Company announced that if comparable restaurant sales growth is 2% to 3% for the year, 2011 diluted earnings per share growth would likely be 5% to 15% compared to 2010. This is based, in part, on the following assumptions:
· Approximately 20 company restaurant openings;
· Food cost inflation of 2.0% to 3.0%; and
· Total capital expenditures of approximately $60 to $65 million.
Conference Call
The Company is hosting a conference call today, November 1, 2010, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 879-6203 or (719) 325-4920 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 8033424 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 330 restaurants system-wide in 46 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, 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, our ability to acquire franchise restaurants, our ability to integrate the franchise restaurants we acquire or other concepts we develop, strength of consumer spending, conditions beyond the Company’s control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting the Company’s customers or food supplies, acts of war or terrorism 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
Price Cooper
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 |
| 39 Weeks Ended |
| ||||||||
|
| September 28, |
| September 29, |
| September 28, |
| September 29, |
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Revenue: |
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|
|
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|
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| ||||
Restaurant sales |
| $ | 243,405 |
| $ | 224,417 |
| $ | 753,582 |
| $ | 708,808 |
|
Franchise royalties and fees |
| 2,208 |
| 2,050 |
| 6,817 |
| 6,155 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total revenue |
| 245,613 |
| 226,467 |
| 760,399 |
| 714,963 |
| ||||
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|
|
|
|
|
|
|
|
| ||||
Costs and expenses: |
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Restaurant operating costs: |
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|
|
|
|
|
| ||||
Cost of sales |
| 79,101 |
| 74,489 |
| 244,560 |
| 237,844 |
| ||||
Labor |
| 71,835 |
| 67,630 |
| 221,241 |
| 210,203 |
| ||||
Rent |
| 5,329 |
| 5,029 |
| 15,886 |
| 14,870 |
| ||||
Other operating |
| 43,476 |
| 38,778 |
| 128,841 |
| 119,450 |
| ||||
Pre-opening |
| 2,150 |
| 1,194 |
| 4,562 |
| 4,411 |
| ||||
Depreciation and amortization |
| 10,262 |
| 10,395 |
| 30,861 |
| 31,482 |
| ||||
Impairment and closure |
| 44 |
| (201 | ) | 302 |
| (273 | ) | ||||
General and administrative |
| 11,968 |
| 11,872 |
| 39,263 |
| 35,918 |
| ||||
|
|
|
|
|
|
|
|
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| ||||
Total costs and expenses |
| 224,165 |
| 209,186 |
| 685,516 |
| 653,905 |
| ||||
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|
|
|
|
|
|
|
|
| ||||
Income from operations |
| 21,448 |
| 17,281 |
| 74,883 |
| 61,058 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest expense, net |
| 644 |
| 784 |
| 2,078 |
| 2,517 |
| ||||
Equity income from investments in unconsolidated affiliates |
| 155 |
| 36 |
| 355 |
| 185 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before taxes |
| 20,959 |
| 16,533 |
| 73,160 |
| 58,726 |
| ||||
Provision for income taxes |
| 6,478 |
| 5,431 |
| 23,133 |
| 18,582 |
| ||||
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| ||||
Net income including noncontrolling interests |
| $ | 14,481 |
| $ | 11,102 |
| $ | 50,027 |
| $ | 40,144 |
|
Less: Net income attributable to noncontrolling interests |
| 529 |
| 407 |
| 1,798 |
| 1,374 |
| ||||
Net income attributable to Texas Roadhouse, Inc. and subsidiaries |
| $ | 13,952 |
| $ | 10,695 |
| $ | 48,229 |
| $ | 38,770 |
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Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: |
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Basic |
| $ | 0.19 |
| $ | 0.15 |
| $ | 0.68 |
| $ | 0.56 |
|
Diluted |
| $ | 0.19 |
| $ | 0.15 |
| $ | 0.66 |
| $ | 0.54 |
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Weighted average shares outstanding: |
|
|
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|
|
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| ||||
Basic |
| 71,660 |
| 70,204 |
| 71,273 |
| 69,847 |
| ||||
Diluted |
| 73,002 |
| 71,550 |
| 72,727 |
| 71,151 |
|
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(in thousands)
|
| (unaudited) |
|
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| ||
|
| September 28, 2010 |
| December 29, 2009 |
| ||
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Cash and cash equivalents |
| $ | 55,425 |
| $ | 46,858 |
|
Other current assets |
| 27,167 |
| 27,458 |
| ||
Property and equipment, net |
| 456,473 |
| 456,281 |
| ||
Goodwill |
| 113,465 |
| 113,465 |
| ||
Intangible asset, net |
| 10,387 |
| 11,194 |
| ||
Other assets |
| 7,630 |
| 6,817 |
| ||
|
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|
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| ||
Total assets |
| $ | 670,547 |
| $ | 662,073 |
|
|
|
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|
| ||
Current maturities of long-term debt and obligations under capital leases |
| 267 |
| 247 |
| ||
Other current liabilities |
| 88,399 |
| 107,956 |
| ||
Long-term debt and obligations under capital leases, excluding current maturities |
| 61,977 |
| 101,179 |
| ||
Other liabilities |
| 39,079 |
| 29,741 |
| ||
Texas Roadhouse, Inc. and subsidiaries stockholders’ equity |
| 478,123 |
| 420,372 |
| ||
Noncontrolling interests |
| 2,702 |
| 2,578 |
| ||
|
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|
|
|
| ||
Total liabilities and equity |
| $ | 670,547 |
| $ | 662,073 |
|
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands, except per share data)
(unaudited)
|
| 39 Weeks Ended |
| ||||
|
| September 28, |
| September 29, |
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Cash flows from operating activities: |
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Net income including noncontrolling interests |
| $ | 50,027 |
| $ | 40,144 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
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Depreciation and amortization |
| 30,861 |
| 31,482 |
| ||
Share-based compensation expense |
| 5,705 |
| 5,642 |
| ||
Other noncash adjustments |
| (752 | ) | 2,830 |
| ||
Change in working capital |
| (11,539 | ) | (11,802 | ) | ||
Net cash provided by operating activities |
| 74,302 |
| 68,296 |
| ||
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Cash flows from investing activities: |
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|
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Capital expenditures - property and equipment |
| (31,598 | ) | (34,814 | ) | ||
Acquisition of franchise restaurants, net of cash acquired |
| — |
| 25 |
| ||
Proceeds from sale of property and equipment, including insurance proceeds |
| 175 |
| 2,329 |
| ||
Net cash used in investing activities |
| (31,423 | ) | (32,460 | ) | ||
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Cash flows from financing activities: |
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Repayments of revolving credit facility, net |
| (39,000 | ) | (6,000 | ) | ||
Other financing activities |
| 4,688 |
| 739 |
| ||
Net cash used in financing activities |
| (34,312 | ) | (5,261 | ) | ||
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|
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|
|
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Net increase in cash and cash equivalents |
| 8,567 |
| 30,575 |
| ||
Cash and cash equivalents - beginning of year |
| 46,858 |
| 5,258 |
| ||
Cash and cash equivalents - end of year |
| $ | 55,425 |
| $ | 35,833 |
|
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands)
(unaudited)
|
| Third Quarter |
| Change |
| Year to Date |
| Change |
| ||||||||
|
| 2010 |
| 2009 |
| vs LY |
| 2010 |
| 2009 |
| vs LY |
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Restaurant openings |
|
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|
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| ||||
Company |
| 3 |
| 1 |
| 2 |
| 7 |
| 12 |
| (5 | ) | ||||
Franchise |
| 0 |
| 2 |
| (2 | ) | 1 |
| 3 |
| (2 | ) | ||||
Total |
| 3 |
| 3 |
| 0 |
| 8 |
| 15 |
| (7 | ) | ||||
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Restaurant closures |
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|
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Company |
| 0 |
| (2 | ) | 2 |
| (1 | ) | (2 | ) | 1 |
| ||||
Franchise |
| 0 |
| 0 |
| 0 |
| 0 |
| (1 | ) | 1 |
| ||||
Total |
| 0 |
| (2 | ) | 2 |
| (1 | ) | (3 | ) | 2 |
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Restaurants open at the end of the quarter |
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Company |
| 267 |
| 255 |
| 12 |
|
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|
|
|
|
| ||||
Franchise |
| 71 |
| 71 |
| 0 |
|
|
|
|
|
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Total |
| 338 |
| 326 |
| 12 |
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Company-owned restaurants |
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Restaurant sales |
| $ | 243,405 |
| $ | 224,417 |
| 8.5 | % | $ | 753,582 |
| $ | 708,808 |
| 6.3 | % |
Store weeks |
| 3,450 |
| 3,331 |
| 3.6 | % | 10,294 |
| 9,893 |
| 4.1 | % | ||||
Comparable restaurant sales growth (1) |
| 4.3 | % | (4.6 | )% |
|
| 2.1 | % | (3.0 | )% |
|
| ||||
Average unit volume (2) |
| $ | 914 |
| $ | 874 |
| 4.6 | % | $ | 2,836 |
| $ | 2,792 |
| 1.6 | % |
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Restaurant operating costs (as a % of restaurant sales) |
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Cost of sales |
| 32.5 | % | 33.2 | % | (69 | )bps | 32.5 | % | 33.6 | % | (110 | )bps | ||||
Labor |
| 29.5 | % | 30.1 | % | (62 | )bps | 29.4 | % | 29.7 | % | (30 | )bps | ||||
Rent |
| 2.2 | % | 2.2 | % | (5 | )bps | 2.1 | % | 2.1 | % | 1 | bps | ||||
Other operating |
| 17.9 | % | 17.3 | % | 58 | bps | 17.1 | % | 16.9 | % | 24 | bps | ||||
Total |
| 82.1 | % | 82.8 | % | (79 | )bps | 81.0 | % | 82.2 | % | (114 | )bps | ||||
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Restaurant margins (3) |
| 17.9 | % | 17.2 | % | 79 | bps | 19.0 | % | 17.8 | % | 114 | bps | ||||
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Franchise-owned restaurants |
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Franchise royalties and fees |
| $ | 2,208 |
| $ | 2,050 |
| 7.7 | % | $ | 6,817 |
| $ | 6,155 |
| 10.8 | % |
Store weeks |
| 912 |
| 900 |
| 1.3 | % | 2,707 |
| 2,694 |
| 0.5 | % | ||||
Comparable restaurant sales growth (1) |
| 4.4 | % | (3.6 | )% |
|
| 2.4 | % | (3.0 | )% |
|
| ||||
Average unit volume (2) |
| $ | 905 |
| $ | 856 |
| 5.7 | % | $ | 2,829 |
| $ | 2,721 |
| 4.0 | % |
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Pre-opening expense |
| $ | 2,150 |
| $ | 1,194 |
| 80.1 | % | $ | 4,562 |
| $ | 4,411 |
| 3.4 | % |
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Depreciation and amortization |
| $ | 10,262 |
| $ | 10,395 |
| (1.3 | )% | $ | 30,861 |
| $ | 31,482 |
| (2.0 | )% |
As a % of revenue |
| 4.2 | % | 4.6 | % | (41 | )bps | 4.1 | % | 4.4 | % | (34 | )bps | ||||
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Impairment and closure |
| $ | 44 |
| $ | (201 | ) | NM |
| $ | 302 |
| $ | (273 | ) | NM |
|
As a % of revenue |
| 0.0 | % | (0.1 | )% | 11 | bps | 0.0 | % | (0.0 | )% | 8 | bps | ||||
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General and administrative expenses |
| $ | 11,968 |
| $ | 11,872 |
| 0.8 | % | $ | 39,263 |
| $ | 35,918 |
| 9.3 | % |
As a % of revenue |
| 4.9 | % | 5.2 | % | (37 | )bps | 5.2 | % | 5.0 | % | 14 | 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 volumes for Q3 2009 and 2009 YTD were adjusted to reflect restaurant sales of any acquired franchise restaurants as part of Company-owned restaurants average unit volume and were excluded from franchise-owned restaurants average unit volume.
(3) Restaurant margins represent restaurant sales less restaurant operating costs (as a percentage of restaurant sales).
NM - Not meaningful
Amounts may not foot due to rounding.