Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 29, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Texas Roadhouse, Inc. | |
Entity Central Index Key | 1,289,460 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-29 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 70,067,587 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 70,965 | $ 86,122 |
Receivables, net of allowance for doubtful accounts of $54 at June 30, 2015 and $10 at December 30, 2014 | 19,883 | 34,023 |
Inventories, net | 14,074 | 14,256 |
Prepaid expenses | 20,724 | 10,552 |
Deferred tax assets, net | 3,272 | 2,773 |
Total current assets | 128,918 | 147,726 |
Property and equipment, net of accumulated depreciation of $371,868 at June 30, 2015 and $347,222 at December 30, 2014 | 689,204 | 649,637 |
Goodwill | 116,571 | 116,571 |
Intangible assets, net | 5,515 | 6,203 |
Other assets | 25,416 | 23,005 |
Total assets | 965,624 | 943,142 |
Current liabilities: | ||
Current maturities of long-term debt | 136 | 129 |
Accounts payable | 46,915 | 43,585 |
Deferred revenue - gift cards | 47,152 | 79,462 |
Accrued wages | 34,945 | 30,375 |
Income taxes payable | 5,136 | 1,583 |
Accrued taxes and licenses | 17,850 | 17,592 |
Dividends payable | 11,908 | 10,443 |
Other accrued liabilities | 37,692 | 32,802 |
Total current liabilities | 201,734 | 215,971 |
Long-term debt, excluding current maturities | 50,623 | 50,693 |
Stock option and other deposits | 6,679 | 6,005 |
Deferred rent | 29,051 | 26,964 |
Deferred tax liabilities, net | 1,793 | 6,004 |
Other liabilities | 23,914 | 22,549 |
Total liabilities | $ 313,794 | $ 328,186 |
Texas Roadhouse, Inc. and subsidiaries stockholders' equity: | ||
Preferred stock ($0.001 par value, 1,000,000 shares authorized; no shares issued or outstanding) | ||
Common stock ($0.001 par value, 100,000,000 shares authorized, 70,048,399 and 69,628,781 shares issued and outstanding at June 30, 2015 and December 30, 2014, respectively) | $ 70 | $ 70 |
Additional paid-in-capital | 195,860 | 189,168 |
Retained earnings | 449,062 | 419,436 |
Accumulated other comprehensive loss | (348) | (782) |
Total Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 644,644 | 607,892 |
Noncontrolling interests | 7,186 | 7,064 |
Total equity | 651,830 | 614,956 |
Total liabilities and equity | $ 965,624 | $ 943,142 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 30, 2014 |
Condensed Consolidated Balance Sheets | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 54 | $ 10 |
Property and equipment, accumulated depreciation (in dollars) | $ 371,868 | $ 347,222 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 70,048,399 | 69,628,781 |
Common stock, shares outstanding | 70,048,399 | 69,628,781 |
Condensed Statements of Income
Condensed Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jul. 01, 2014 | Jun. 30, 2015 | Jul. 01, 2014 | |
Revenue: | ||||
Restaurant sales | $ 450,692 | $ 391,819 | $ 906,985 | $ 785,775 |
Franchise royalties and fees | 4,006 | 3,544 | 7,943 | 6,730 |
Total revenue | 454,698 | 395,363 | 914,928 | 792,505 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||||
Cost of sales | 168,077 | 137,082 | 328,057 | 271,894 |
Labor | 132,084 | 115,182 | 263,488 | 229,854 |
Rent | 9,138 | 8,128 | 18,117 | 16,170 |
Other operating | 68,358 | 60,362 | 137,675 | 121,215 |
Pre-opening | 4,909 | 4,455 | 8,727 | 8,732 |
Depreciation and amortization | 16,816 | 14,433 | 33,151 | 28,518 |
Impairment and closure | 9 | 26 | ||
General and administrative | 23,620 | 21,311 | 45,417 | 41,511 |
Total costs and expenses | 423,002 | 360,962 | 834,632 | 717,920 |
Income from operations | 31,696 | 34,401 | 80,296 | 74,585 |
Interest expense, net | 495 | 514 | 1,010 | 1,072 |
Equity income from investments in unconsolidated affiliates | (467) | (353) | (839) | (565) |
Income before taxes | 31,668 | 34,240 | 80,125 | 74,078 |
Provision for income taxes | 9,402 | 10,215 | 24,278 | 22,445 |
Net income including noncontrolling interests | 22,266 | 24,025 | 55,847 | 51,633 |
Less: Net income attributable to noncontrolling interests | 1,128 | 944 | 2,417 | 2,087 |
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | 21,138 | 23,081 | 53,430 | 49,546 |
Other comprehensive income, net of tax: | ||||
Unrealized gain on derivatives, net of tax of $135, $124, $262 and $237, respectively | 215 | 196 | 416 | 376 |
Foreign currency translation adjustment, net of tax of $4 ,$- ,$11 and $-, respectively | 12 | 18 | ||
Total other comprehensive income, net of tax | 227 | 196 | 434 | 376 |
Total comprehensive income | $ 21,365 | $ 23,277 | $ 53,864 | $ 49,922 |
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | ||||
Basic (in dollars per share) | $ 0.30 | $ 0.33 | $ 0.76 | $ 0.71 |
Diluted (in dollars per share) | $ 0.30 | $ 0.33 | $ 0.76 | $ 0.70 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 70,026 | 69,705 | 69,933 | 69,918 |
Diluted (in shares) | 70,648 | 70,577 | 70,588 | 70,822 |
Cash dividends declared per share (in dollars per share) | $ 0.17 | $ 0.15 | $ 0.34 | $ 0.30 |
Condensed Statements of Income5
Condensed Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jul. 01, 2014 | Jun. 30, 2015 | Jul. 01, 2014 | |
Condensed Consolidated Statements of Income and Comprehensive Income | ||||
Unrealized gain on derivatives, tax | $ 135 | $ 124 | $ 262 | $ 237 |
Foreign currency translation adjustment, tax | $ 4 | $ 11 |
Condensed Statement of Stockhol
Condensed Statement of Stockholders' Equity - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total Texas Roadhouse, Inc. and Subsidiaries | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total |
Balance at Dec. 30, 2014 | $ 607,892 | $ 70 | $ 189,168 | $ 419,436 | $ (782) | $ 7,064 | $ 614,956 |
Balance (in shares) at Dec. 30, 2014 | 69,628,781 | 69,628,781 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 53,430 | 53,430 | 2,417 | $ 55,847 | |||
Other comprehensive income | 434 | 434 | 434 | ||||
Distributions to noncontrolling interests | (2,295) | (2,295) | |||||
Dividends declared and paid ($0.17 per share) | (11,896) | (11,896) | (11,896) | ||||
Dividends declared ($0.17 per share) | (11,908) | (11,908) | (11,908) | ||||
Shares issued under stock option plan including tax effects | 5,505 | 5,505 | 5,505 | ||||
Shares issued under stock option plan including tax effects (in shares) | 173,223 | ||||||
Repurchase shares of common stock | (3,138) | (3,138) | (3,138) | ||||
Repurchase shares of common stock (in shares) | (88,089) | ||||||
Settlement of restricted stock units | 1 | $ 1 | 1 | ||||
Settlement of restricted stock units (in shares) | 506,980 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (5,891) | $ (1) | (5,890) | (5,891) | |||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (172,496) | ||||||
Share-based compensation | 10,215 | 10,215 | 10,215 | ||||
Balance at Jun. 30, 2015 | $ 644,644 | $ 70 | $ 195,860 | $ 449,062 | $ (348) | $ 7,186 | $ 651,830 |
Balance (in shares) at Jun. 30, 2015 | 70,048,399 | 70,048,399 |
Condensed Statement of Stockho7
Condensed Statement of Stockholders' Equity (Parenthetical) | 6 Months Ended |
Jun. 30, 2015$ / shares | |
Condensed Consolidated Statement of Stockholders' Equity | |
Dividends declared and paid per share (in dollars per share) | $ (0.17) |
Dividends declared per share (in dollars per share) | $ (0.17) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jul. 01, 2014 | |
Cash flows from operating activities: | ||
Net income including noncontrolling interests | $ 55,847 | $ 51,633 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 33,151 | 28,518 |
Deferred income taxes | (5,205) | (2,979) |
Loss on disposition of assets | 2,785 | 2,205 |
Equity income from investments in unconsolidated affiliates | (839) | (565) |
Distributions of income received from investments in unconsolidated affiliates | 311 | 290 |
Provision for doubtful accounts | (44) | 5 |
Share-based compensation expense | 10,215 | 7,399 |
Changes in operating working capital: | ||
Receivables | 14,184 | 8,946 |
Inventories | 182 | 194 |
Prepaid expenses and other current assets | 1,736 | 1,636 |
Other assets | (1,853) | (266) |
Accounts payable | 1,254 | (809) |
Deferred revenue-gift cards | (32,310) | (26,348) |
Accrued wages | 4,570 | 2,080 |
Excess tax benefits from share-based compensation | (3,037) | (1,765) |
Prepaid income taxes and income taxes payable | 6,589 | 8,347 |
Accrued taxes and licenses | 258 | (1,334) |
Other accrued liabilities | 2,202 | 2,905 |
Deferred rent | 2,087 | 1,573 |
Other liabilities | 2,740 | 72 |
Net cash provided by operating activities | 94,823 | 81,737 |
Cash flows from investing activities: | ||
Capital expenditures-property and equipment | (70,933) | (53,971) |
Proceeds from sale of property and equipment, including insurance proceeds | 9 | 1,193 |
Net cash used in investing activities | (70,924) | (52,778) |
Cash flows from financing activities: | ||
Repurchase of shares of common stock | (3,138) | (31,760) |
Distributions to noncontrolling interests | (2,295) | (2,186) |
Excess tax benefits from share-based compensation | 3,037 | 1,765 |
Proceeds from (repayments of) stock option and other deposits, net | 849 | (506) |
Indirect repurchase of shares for minimum tax withholdings | (5,890) | (4,768) |
Principal payments on long-term debt and capital lease obligations | (63) | (360) |
Proceeds from exercise of stock options | 2,691 | 1,916 |
Dividends paid | (34,247) | (10,473) |
Net cash used in financing activities | (39,056) | (46,372) |
Net decrease in cash and cash equivalents | (15,157) | (17,413) |
Cash and cash equivalents-beginning of period | 86,122 | 94,874 |
Cash and cash equivalents-end of period | 70,965 | 77,461 |
Supplemental disclosures of cash flow information: | ||
Interest, net of amounts capitalized | 1,159 | 1,200 |
Income taxes paid | 22,893 | 17,077 |
Capital expenditures included in current liabilities | $ 5,006 | 4,756 |
Receivable from minority interest in joint venture | $ 730 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Texas Roadhouse, Inc. (“TRI”), our wholly-owned subsidiaries and subsidiaries in which we own more than a 50 percent interest (collectively the “Company,” “we,” “our” and/or “us”) as of June 30, 2015 and December 30, 2014 and for the 13 and 26 weeks ended June 30, 2015 and July 1, 2014. Our wholly-owned subsidiaries include: Texas Roadhouse Holdings LLC (“Holdings”), Texas Roadhouse Development Corporation (“TRDC”), Texas Roadhouse Management Corporation (“Management Corp.”) and Strategic Restaurant Concepts, LLC (“Strategic Concepts”). TRI and our subsidiaries operate restaurants primarily under the Texas Roadhouse name. Holdings also provides supervisory and administrative services for certain other franchise Texas Roadhouse restaurants. TRDC sells franchise rights and collects the franchise royalties and fees. Management Corp. provides management services to the Company and certain other franchise Texas Roadhouse restaurants. All significant balances and transactions between the consolidated entities have been eliminated. As of June 30, 2015, we owned and operated 384 restaurants and franchised an additional 80 restaurants in 49 states and four foreign countries. Of the 384 company-owned restaurants that were operating at June 30, 2015, 368 were wholly-owned and 16 were majority-owned. As of July 1, 2014, we owned and operated 358 restaurants and franchised an additional 75 restaurants in 49 states and three foreign countries. Of the 358 company-owned restaurants that were operating at July 1, 2014, 343 were wholly-owned and 15 were majority-owned. As of June 30, 2015 and July 1, 2014, we owned 5.0% to 10.0% equity interests in 24 and 23 franchise restaurants, respectively. While we exercise significant control over these Texas Roadhouse franchise restaurants, we do not consolidate their financial position, results of operations or cash flows as it is immaterial to our consolidated financial position, results of operations and cash flows. Additionally, as of June 30, 2015 and July 1, 2014, we owned a 40% equity interest in four non-Texas Roadhouse restaurants as part of a joint venture agreement with a casual dining restaurant operator in China. The unconsolidated restaurants are accounted for using the equity method. Our investments in these unconsolidated affiliates are included in Other assets in our unaudited condensed consolidated balance sheets, and we record our percentage share of net income earned by these unconsolidated affiliates in our unaudited condensed consolidated statements of income and comprehensive income under Equity income from investments in unconsolidated affiliates. All significant intercompany balances and transactions for these unconsolidated restaurants have been eliminated. We have made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reporting of revenue and expenses during the periods to prepare these unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”). Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill, obligations related to insurance reserves and income taxes. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position, results of operations and cash flows for the periods presented. The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, except that certain information and footnotes have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”). Operating results for the 13 and 26 weeks ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 29, 2015. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 30, 2014. Certain prior year amounts have been reclassified in our unaudited condensed consolidated financial statements to conform with current year presentation. Our significant interim accounting policies include the recognition of income taxes using an estimated annual effective tax rate. |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Share-based Compensation | |
Share-based Compensation | (2) Share-based Compensation On May 16, 2013, our stockholders approved the Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (the “Plan”). The Plan provides for the granting of incentive and non-qualified stock options to purchase shares of common stock, stock appreciation rights, and full value awards, including restricted stock, restricted stock units (“RSUs”), deferred stock units, performance stock and performance stock units (“PSUs”). As a result of the approval of the Plan, no future awards will be made under the Texas Roadhouse, Inc. 2004 Equity Incentive Plan. Beginning in 2008, we changed the method by which we provide share-based compensation to our employees by granting primarily RSUs as a form of share-based compensation rather than stock option grants. An RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. The following table summarizes the share-based compensation expense recorded in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Labor expense $ $ $ $ General and administrative expense Total share-based compensation expense $ $ $ $ Share-based compensation activity by type of grant as of June 30, 2015 and changes during the 26 weeks then ended are presented below. Summary Details for RSUs Shares Weighted- Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 30, 2014 $ Granted Forfeited ) Vested ) Outstanding at June 30, 2015 $ $ As of June 30, 2015, with respect to unvested RSUs, there was $21.6 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1.4 years. The vesting terms of the RSUs range from approximately 1.0 to 5.0 years. The total intrinsic value of RSUs vested during the 13 weeks ended June 30, 2015 and July 1, 2014 was $4.0 million and $2.7 million, respectively. For the 26 weeks ended June 30, 2015 and July 1, 2014, the total intrinsic value of RSUs vested was $17.4 million and $14.2 million, respectively. Summary Details for PSUs In 2015, we granted PSUs to two of our executives subject to a one-year vesting and the achievement of earnings targets. The number of units which vest at the end of the one-year vesting period is based on performance against the earnings targets. Share-based compensation is recognized for the number of units expected to vest at the end of the period and is expensed beginning on the grant date and through the performance period. For each grant, PSUs meeting the performance criteria will vest as of the end of our fiscal year. The distribution of vested performance stock units as common stock will occur in the first quarter of 2016. We granted 115,000 PSUs with a grant date fair value per share of $34.77. As of June 30, 2015, with respect to unvested PSUs, there was $2.1 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 0.5 years. Summary Details for Share Options Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 30, 2014 $ Granted — — Forfeited — — Exercised ) Outstanding at June 30, 2015 $ $ Exercisable at June 30, 2015 $ $ The total intrinsic value of options exercised during the 13 weeks ended June 30, 2015 and July 1, 2014 was $1.3 million and $0.8 million, respectively. For the 26 weeks ended June 30, 2015 and July 1, 2014, the total intrinsic value of options exercised was $3.6 million and $2.3 million, respectively. No stock options vested during the 13 or 26 weeks ended June 30, 2015 or July 1, 2014. |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2015 | |
Long-term Debt | |
Long-term Debt | (3) Long-term Debt Long-term debt consisted of the following: June 30, 2015 December 30, 2014 Installment loan, due 2020 $ $ Revolver Less current maturities $ $ The interest rate for our installment loan outstanding at both June 30, 2015 and December 30, 2014 was 10.46%. The debt is secured by certain land and building assets and is subject to certain prepayment penalties. On November 1, 2013, we entered into Omnibus Amendment No. 1 and Consent to Credit Agreement and Guaranty with respect to our revolving credit facility dated as of August 12, 2011 with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A., PNC Bank, N.A., and Wells Fargo, N.A. The amended revolving credit facility, which has a maturity date of November 1, 2018, remains an unsecured, revolving credit agreement under which we may borrow up to $200.0 million. The amendment provides us with the option to increase the revolving credit facility by $200.0 million, up to $400.0 million, subject to certain limitations. The terms of the amended revolving credit facility require us to pay interest on outstanding borrowings at the London Interbank Offered Rate (“LIBOR”) plus a margin of 0.875% to 1.875%, depending on our leverage ratio, or the Alternate Base Rate, which is the higher of the issuing bank’s prime lending rate, the Federal Funds rate plus 0.50% or the Adjusted Eurodollar Rate for a one month interest period on such day plus 1.0%. We are also required to pay a commitment fee of 0.125% to 0.30% per year on any unused portion of the amended revolving credit facility, depending on our leverage ratio. The weighted-average interest rate for the revolving credit facility at both June 30, 2015 and December 30, 2014 was 3.96%, including the impact of interest rate swaps. At June 30, 2015, we had $50.0 million outstanding under the revolving credit facility and $144.2 million of availability, net of $5.8 million of outstanding letters of credit. The lenders’ obligation to extend credit under the amended revolving credit facility depends on us maintaining certain financial covenants, including a minimum consolidated fixed charge coverage ratio of 2.00 to 1.00 and a maximum consolidated leverage ratio of 3.00 to 1.00. The amended revolving credit facility permits us to incur additional secured or unsecured indebtedness outside the facility, except for the incurrence of secured indebtedness that in the aggregate exceeds 15% of our consolidated tangible net worth or circumstances where the incurrence of secured or unsecured indebtedness would prevent us from complying with our financial covenants. We were in compliance with all covenants as of June 30, 2015. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes | |
Income Taxes | (4) Income Taxes A reconciliation of the statutory federal income tax rate to our effective tax rate for the 13 and 26 weeks ended June 30, 2015 and July 1, 2014 is as follows: 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Tax at statutory federal rate % % % % State and local tax, net of federal benefit FICA tip tax credit ) ) ) ) Work opportunity tax credit ) ) ) ) Incentive stock options ) ) ) ) Nondeductible officer compensation Net income attributable to noncontrolling interests ) ) ) ) Other ) ) Total % % % % |
Derivative and Hedging Activiti
Derivative and Hedging Activities | 6 Months Ended |
Jun. 30, 2015 | |
Derivative and Hedging Activities | |
Derivative and Hedging Activities | (5) Derivative and Hedging Activities We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging (“ASC 815”) . We use interest rate-related derivative instruments to manage our exposure to fluctuations of interest rates. By using these instruments, we expose ourselves, from time to time, to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. We attempt to minimize the credit risk by entering into transactions with high-quality counterparties whose credit rating is evaluated on a quarterly basis. Our counterparty in the interest rate swaps is JPMorgan Chase Bank, N.A. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. We attempt to minimize market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be taken. Interest Rate Swaps On October 22, 2008, we entered into an interest rate swap, starting on November 7, 2008, with a notional amount of $25.0 million to hedge a portion of the cash flows of our variable rate borrowings. We have designated the interest rate swap as a cash flow hedge of our exposure to variability in future cash flows attributable to interest payments on a $25.0 million tranche of floating rate debt borrowed under our amended revolving credit facility. Under the terms of the swap, we pay a fixed rate of 3.83% on the $25.0 million notional amount and receive payments from the counterparty based on the one month LIBOR for a term ending on November 7, 2015, effectively resulting in a fixed rate on the LIBOR component of the $25.0 million notional amount. On January 7, 2009, we entered into an interest rate swap, starting on February 7, 2009, with a notional amount of $25.0 million to hedge a portion of the cash flows of our variable rate borrowings. We have designated the interest rate swap as a cash flow hedge of our exposure to variability in future cash flows attributable to interest payments on a $25.0 million tranche of floating rate debt borrowed under our amended revolving credit facility. Under the terms of the swap, we pay a fixed rate of 2.34% on the $25.0 million notional amount and receive payments from the counterparty based on the one month LIBOR for a term ending on January 7, 2016, effectively resulting in a fixed rate on the LIBOR component of the $25.0 million notional amount. We entered into the above interest rate swaps with the objective of eliminating the variability of our interest cost that arises because of changes in the variable interest rate for the designated interest payments. Changes in the fair value of the interest rate swaps will be reported as a component of accumulated other comprehensive income or loss (“AOCI”). Additionally, amounts related to the yield adjustment of the hedged interest payments are subsequently reclassified into interest expense in the same period during which the related interest affects earnings. We will reclassify any gain or loss from AOCI, net of tax, in our unaudited condensed consolidated balance sheet to interest expense in our unaudited condensed consolidated statement of income and comprehensive income when an interest rate swap expires or at the time we choose to terminate a swap. See note 10 for fair value discussion of these interest rate swaps. The following table summarizes the fair value and presentation in the unaudited condensed consolidated balance sheets for derivatives designated as hedging instruments under FASB ASC 815: Derivative Assets Derivative Liabilities Balance Sheet Location June 30, 2015 December 30, 2014 June 30, 2015 December 30, 2014 Derivative Contracts Designated as Hedging Instruments under ASC 815 ) Interest rate swaps $ — $ — $ $ Total Derivative Contracts $ — $ — $ $ (1) The derivative liabilities are included in other accrued liabilities on the unaudited condensed consolidated balance sheets. The following table summarizes the effect of our interest rate swaps in the unaudited condensed consolidated statements of income and comprehensive income for the 13 and 26 weeks ended June 30, 2015 and July 1, 2014: 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Gain recognized in AOCI, net of tax (effective portion) $ $ $ $ Loss reclassified from AOCI to income (effective portion) $ $ $ $ The loss reclassified from AOCI to income was recognized in interest expense on our unaudited condensed consolidated statements of income and comprehensive income. For each of the 13 and 26 weeks ended June 30, 2015 and July 1, 2014, we did not recognize any gain or loss due to hedge ineffectiveness related to the derivative instruments in the unaudited condensed consolidated statements of income and comprehensive income. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2015 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | (6) Recent Accounting Pronouncements Revenue Recognition (Accounting Standards Update 2014-09, “ASU 2014-09”) In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. In July 2015, the FASB approved a one-year deferral of the effective date of the new revenue standard. ASU 2014-09 is now effective for fiscal years beginning on or after December 15, 2017 (our 2018 fiscal year) with early adoption permitted in the first quarter of 2017. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial position, results of operations, cash flows and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. Going Concern (Accounting Standards Update 2014-15, “ASU 2014-15”) In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements — Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , which requires the management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern. ASU 2014-15 is effective for annual periods ending after December 15, 2016 (our 2016 fiscal year) and early adoption is permitted. We do not expect this standard to have an impact on our consolidated financial position, results of operations or cash flows upon adoption. Consolidation (Accounting Standards Update 2015-02, “ASU 2015-02”) In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis , which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. ASU 2015-02 is effective for annual and interim periods beginning after December 15, 2015 (our 2016 fiscal year). Early adoption is permitted, including adoption in an interim period. A reporting entity may apply the amendments using a modified retrospective approach or a full retrospective application. We have not selected a transition method or determined the effect, if any, of the standard on our consolidated financial position, results of operations or cash flows. Debt Issuance Costs (Accounting Standards Update 2015-03, “ASU 2015-03”) In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which changes the presentation of debt issuance costs in the financial statements from an asset on the balance sheet to a deduction from the related debt liability. Amortization of the costs will continue to be reported as interest expense. ASU 2015-03 is effective for annual and interim reporting periods beginning after December 15, 2015 (our 2016 fiscal year). Early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial position, results of operations or cash flows upon adoption. Software Licenses (Accounting Standards Updated 2015-05, “ASU 2015-05”) In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance about whether a cloud computing arrangement includes a software license. ASU 2015-05 is effective for annual and interim periods beginning after December 15, 2015 (our 2016 fiscal year). Early adoption is permitted. We have not yet determined the effect, if any, of the standard on our consolidated financial position, results of operations or cash flows. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | (7) Commitments and Contingencies The estimated cost of completing capital project commitments at June 30, 2015 and December 30, 2014 was approximately $178.7 million and $153.2 million, respectively. Effective December 31, 2013, we sold two restaurants, which operated under the name Aspen Creek, located in Irving, Texas and Louisville, Kentucky. We assigned the leases associated with these restaurants to the acquirer, but remain contingently liable under the terms of the leases if the acquirer defaults. We are contingently liable for the initial terms of the leases and any renewal periods. The Irving lease has an initial term that expires December 2019, along with three five-year renewals. The Louisville lease has an initial term that expires November 2023, along with three five-year renewals. The assignment of the Louisville lease releases us from liability after the initial lease term expiration contingent upon certain conditions being met by the acquirer. As the fair value of the guarantees is not considered significant, no liability has been recorded. We entered into real estate lease agreements for five franchises, listed in the table below, before granting franchise rights for those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable if a franchisee defaults, under the terms of the lease. Lease Assignment Date Current Lease Term Expiration Everett, Massachusetts (1) September 2002 February 2018 Longmont, Colorado (1) October 2003 May 2019 Montgomeryville, Pennsylvania October 2004 June 2021 Fargo, North Dakota (1) February 2006 July 2016 Logan, Utah January 2009 August 2019 (1) As discussed in note 8, these restaurants are owned, in whole or part, by certain officers, directors and 5% shareholders of the Company. We are contingently liable for the initial terms of the leases and any renewal periods. All of the leases have three five-year renewals. As the fair value of the guarantees is not considered significant, no liability has been recorded. As of June 30, 2015 and December 30, 2014, we are contingently liable for $17.6 million and $18.0 million, respectively, for the seven leases discussed above. These amounts represent the maximum potential liability of future payments under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. No material liabilities have been recorded as of June 30, 2015 and December 30, 2014 as the likelihood of default was deemed to be less than probable. During the 13 and 26 weeks ended June 30, 2015, we bought most of our beef from four suppliers. Although there are a limited number of beef suppliers, we believe that other suppliers could provide a similar product on comparable terms. A change in suppliers, however, could cause supply shortages, higher costs to secure adequate supplies and a possible loss of sales, which would affect operating results adversely. We have no material minimum purchase commitments with our vendors that extend beyond a year. On September 30, 2011, the U.S. Equal Employment Opportunity Commission (“EEOC”) filed a lawsuit styled Equal Employment Opportunity Commission v. Texas Roadhouse, Inc., Texas Roadhouse Holdings LLC, Texas Roadhouse Management Corp. in the United States District Court, District of Massachusetts, Civil Action Number 1:11-cv-11732. The complaint alleges that applicants over the age of 40 were denied employment in our restaurants in bartender, host, server and server assistant positions due to their age. The EEOC is seeking injunctive relief, remedial actions, payment of damages to the applicants and costs. We have filed an answer to the complaint, and the case is in discovery. We deny liability; however, in view of the inherent uncertainties of litigation, the outcome of this case cannot be predicted at this time. We cannot estimate the amount or range of loss, if any, associated with this matter. Occasionally, we are a defendant in litigation arising in the ordinary course of our business, including “slip and fall” accidents, employment related claims and claims from guests or employees alleging illness, injury or food quality, health or operational concerns. In the opinion of management, the ultimate disposition of these matters, most of which are covered by insurance, will not have a material effect on our consolidated financial position, results of operations or cash flows. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions | |
Related Party Transactions | (8) Related Party Transactions We have 10 franchise restaurants owned in whole or part, by certain of our officers, directors and stockholders of the Company as of June 30, 2015. These entities paid us fees of approximately $0.5 million and $0.9 million for the 13 and 26 weeks ended June 30, 2015, respectively. As of July 1, 2014 we had 15 franchise restaurants owned in whole or part, by certain of our officers, directors and stockholders of the Company. These entities paid us fees of approximately $0.6 million and $1.3 million for the 13 and 26 weeks ended July 1, 2014, respectively. As disclosed in note 7, we are contingently liable on leases which are related to three of these restaurants. On November 26, 2014, we acquired the remaining ownership interests of a franchise restaurant owned in part by us and certain officers or stockholders of the Company. Prior to this acquisition, we owned 5% interest in the franchise restaurant which we accounted for using the equity method. While we did exercise significant control over the restaurant prior to our acquisition of the remaining ownership interests, we did not consolidate their financial position, results of operations and/or cash flows as it was immaterial to our financial position, results of operations and/or cash flows. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share | |
Earnings Per Share | (9) Earnings Per Share The share and net income per share data for all periods presented are based on the historical weighted-average shares outstanding. The diluted earnings per share calculations show the effect of the weighted-average stock options and RSUs outstanding from our equity incentive plans as discussed in note 2. The following table summarizes the options and nonvested stock that were outstanding but not included in the computation of diluted earnings per share because their inclusion would have had an anti-dilutive effect: 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Restricted Stock Units — — Options — — — — Total — — PSUs have been excluded from the diluted earnings per share calculation because the performance-based criteria have not yet been met. The following table sets forth the calculation of weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ $ $ $ Basic EPS: Weighted-average common shares outstanding Basic EPS $ $ $ $ Diluted EPS: Weighted-average common shares outstanding Dilutive effect of stock options and restricted stock units Shares — diluted Diluted EPS $ $ $ $ |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | (10) Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. Level 1 Inputs based on quoted prices in active markets for identical assets. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the assets, either directly or indirectly. Level 3 Inputs that are unobservable for the asset. There were no transfers among levels within the fair value hierarchy during the 13 and 26 weeks ended June 30, 2015. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level June 30, 2015 December 30, 2014 Interest rate swaps $ ) $ ) Deferred compensation plan - assets Deferred compensation plan - liabilities ) ) The fair values of our interest rate swaps were determined based on industry-standard valuation models. Such models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves. See note 5 for discussion of our interest rate swaps. The Second Amended and Restated Deferred Compensation Plan of Texas Roadhouse Management Corp., as amended, (the “Deferred Compensation Plan”) is a nonqualified deferred compensation plan which allows highly compensated employees to defer receipt of a portion of their compensation and contribute such amounts to one or more investment funds held in a rabbi trust. We report the accounts of the rabbi trust in our unaudited condensed consolidated financial statements. These investments are considered trading securities and are measured at fair value using quoted market prices. The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, are recorded in general and administrative expense in the unaudited condensed consolidated statements of income and comprehensive income. At June 30, 2015 and December 30, 2014, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values based on the short-term nature of these instruments. The fair value of our revolving credit facility at June 30, 2015 and December 30, 2014 approximated its carrying value since it is a variable rate credit facility (Level 2). The fair value of our installment loan is estimated based on the current rates offered to us for instruments of similar terms and maturities. The carrying amounts and related estimated fair values for our installment loan are as follows: June 30, 2015 December 30, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Installment loan — Level 2 $ $ $ $ |
Stock Repurchase Program
Stock Repurchase Program | 6 Months Ended |
Jun. 30, 2015 | |
Stock Repurchase Program | |
Stock Repurchase Program | (11) Stock Repurchase Program On May 22, 2014, our Board of Directors approved a stock repurchase program under which we may repurchase up to $100.0 million of our common stock. This stock repurchase program has no expiration date and replaced a previous stock repurchase program which was approved on February 16, 2012. All repurchases to date under our stock repurchase program have been made through open market transactions. The timing and the amount of any repurchases will be determined by management under parameters established by our Board of Directors, based on its evaluation of our stock price, market conditions and other corporate considerations. For both of the 13 and 26 week periods ended June 30, 2015 we paid approximately $3.1 million to repurchase 88,089 shares of our common stock. As of June 30, 2015, we had approximately $82.3 million remaining under our authorized stock repurchase program. For the 13 and 26 week periods ended July 1, 2014 we paid approximately $7.6 million and $31.8 million to repurchase 300,000 and 1,260,000 shares of our common stock, respectively. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Share-based Compensation | |
Summary of allocation of share-based compensation expense | 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Labor expense $ $ $ $ General and administrative expense Total share-based compensation expense $ $ $ $ |
Summary of restricted stock unit activity | Shares Weighted- Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 30, 2014 $ Granted Forfeited ) Vested ) Outstanding at June 30, 2015 $ $ |
Summary of stock option activity | Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 30, 2014 $ Granted — — Forfeited — — Exercised ) Outstanding at June 30, 2015 $ $ Exercisable at June 30, 2015 $ $ |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Long-term Debt | |
Schedule of long-term debt | June 30, 2015 December 30, 2014 Installment loan, due 2020 $ $ Revolver Less current maturities $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes | |
Schedule of reconciliation of the statutory federal income tax rate to the entity's effective tax rate | 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Tax at statutory federal rate % % % % State and local tax, net of federal benefit FICA tip tax credit ) ) ) ) Work opportunity tax credit ) ) ) ) Incentive stock options ) ) ) ) Nondeductible officer compensation Net income attributable to noncontrolling interests ) ) ) ) Other ) ) Total % % % % |
Derivative and Hedging Activi23
Derivative and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative and Hedging Activities | |
Summary of fair value presentation of derivative instruments designated as hedging instrument | Derivative Assets Derivative Liabilities Balance Sheet Location June 30, 2015 December 30, 2014 June 30, 2015 December 30, 2014 Derivative Contracts Designated as Hedging Instruments under ASC 815 ) Interest rate swaps $ — $ — $ $ Total Derivative Contracts $ — $ — $ $ (1) The derivative liabilities are included in other accrued liabilities on the unaudited condensed consolidated balance sheets. |
Summary of effect of interest rate swaps in the consolidated statements of income and comprehensive income | 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Gain recognized in AOCI, net of tax (effective portion) $ $ $ $ Loss reclassified from AOCI to income (effective portion) $ $ $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies | |
Schedule of real estate lease agreements for franchises | Lease Assignment Date Current Lease Term Expiration Everett, Massachusetts (1) September 2002 February 2018 Longmont, Colorado (1) October 2003 May 2019 Montgomeryville, Pennsylvania October 2004 June 2021 Fargo, North Dakota (1) February 2006 July 2016 Logan, Utah January 2009 August 2019 (1) As discussed in note 8, these restaurants are owned, in whole or part, by certain officers, directors and 5% shareholders of the Company. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share | |
Summary of options and nonvested stock that were outstanding but not included in the computation of diluted earnings per share | 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Restricted Stock Units — — Options — — — — Total — — |
Schedule of calculation of weighted average shares outstanding | The following table sets forth the calculation of weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 26 Weeks Ended June 30, 2015 July 1, 2014 June 30, 2015 July 1, 2014 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ $ $ $ Basic EPS: Weighted-average common shares outstanding Basic EPS $ $ $ $ Diluted EPS: Weighted-average common shares outstanding Dilutive effect of stock options and restricted stock units Shares — diluted Diluted EPS $ $ $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements | |
Schedule of fair value of assets and liabilities measured on a recurring basis | Fair Value Measurements Level June 30, 2015 December 30, 2014 Interest rate swaps $ ) $ ) Deferred compensation plan - assets Deferred compensation plan - liabilities ) ) |
Schedule of carrying amounts and related estimated fair values for installment loan | June 30, 2015 December 30, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Installment loan — Level 2 $ $ $ $ |
Basis of Presentation (Details)
Basis of Presentation (Details) | Jun. 30, 2015restaurantitem | Dec. 30, 2014 | Nov. 25, 2014 | Jul. 01, 2014restaurantitem |
Description of Business | ||||
Number of states in which restaurants operate | item | 49 | 49 | ||
Number of countries in which restaurants operate | item | 4 | 3 | ||
Minimum | ||||
Description of Business | ||||
Threshold percentage of ownership for consolidated subsidiaries | 50.00% | 50.00% | 50.00% | |
Company-owned | ||||
Description of Business | ||||
Number of restaurants | 384 | 358 | ||
Company-owned | Wholly-owned | ||||
Description of Business | ||||
Number of restaurants | 368 | 343 | ||
Company-owned | Majority-owned | ||||
Description of Business | ||||
Number of restaurants | 16 | 15 | ||
Franchise | ||||
Description of Business | ||||
Number of restaurants | 80 | 75 | ||
Franchise | Minority-owned | ||||
Description of Business | ||||
Ownership percentage by entity | 5.00% | |||
Number of restaurants | 24 | 23 | ||
Franchise | Minority-owned | Minimum | ||||
Description of Business | ||||
Ownership percentage by entity | 5.00% | 5.00% | ||
Franchise | Minority-owned | Maximum | ||||
Description of Business | ||||
Ownership percentage by entity | 10.00% | 10.00% | ||
Non-Texas Roadhouse restaurants | Minority-owned | ||||
Description of Business | ||||
Ownership percentage by entity | 40.00% | 40.00% | ||
Number of restaurants | 4 | 4 |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jul. 01, 2014 | Jun. 30, 2015 | Jul. 01, 2014 | |
Share-based compensation expenses | ||||
Number of common shares that an RSU holder would receive upon satisfaction of the vesting requirement (in shares) | 1 | 1 | ||
Share-based compensation expense | $ 5,311 | $ 3,778 | $ 10,215 | $ 7,399 |
Labor expense | ||||
Share-based compensation expenses | ||||
Share-based compensation expense | 1,035 | 1,402 | 2,550 | 2,770 |
General and administrative expense | ||||
Share-based compensation expenses | ||||
Share-based compensation expense | $ 4,276 | $ 2,376 | $ 7,665 | $ 4,629 |
Share-based Compensation (Det29
Share-based Compensation (Details 2) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jul. 01, 2014 | Jun. 30, 2015 | Jul. 01, 2014 | |
Restricted Stock Units, Shares | ||||
Outstanding at the beginning of the period (in shares) | 978,124 | |||
Granted (in shares) | 538,568 | |||
Forfeited (in shares) | (21,910) | |||
Vested (in shares) | (506,980) | |||
Outstanding at the end of period (in shares) | 987,802 | 987,802 | ||
Restricted Stock Units, Weighted-Average Grant Date Fair Value | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 22.52 | |||
Granted (in dollars per share) | 35.30 | |||
Forfeited (in dollars per share) | 26.43 | |||
Vested (in dollars per share) | 19.79 | |||
Outstanding at the end of the period (in dollars per share) | $ 30.80 | $ 30.80 | ||
Weighted-Average Remaining Contractual Term (years) | ||||
Weighted-Average Remaining Contractual Term | 1 year 4 months 24 days | |||
Aggregate Intrinsic Value | ||||
Outstanding at the end of the period (in dollars) | $ 36,973 | $ 36,973 | ||
Intrinsic value of awards vested (in dollars) | 4,000 | $ 2,700 | 17,400 | $ 14,200 |
Unrecognized compensation cost | ||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ 21,600 | $ 21,600 | ||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 1 year 4 months 24 days | |||
Minimum | ||||
Share-based compensation | ||||
Vesting period | 1 year | |||
Maximum | ||||
Share-based compensation | ||||
Vesting period | 5 years |
Share-based Compensation (Det30
Share-based Compensation (Details 3) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($)item$ / sharesshares | Jul. 01, 2014USD ($) | Jun. 30, 2015USD ($)item$ / sharesshares | Jul. 01, 2014USD ($)shares | |
Options | ||||
Shares | ||||
Outstanding at the beginning of the period (in shares) | 636,930 | |||
Exercised (in shares) | (173,223) | |||
Outstanding at the end of the period (in shares) | 463,707 | 463,707 | ||
Exercisable at the end of period (in shares) | 463,707 | 463,707 | ||
Stock options vested (in shares) | 0 | 0 | ||
Weighted-Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 14.20 | |||
Exercised (in dollars per share) | $ / shares | 15.54 | |||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 13.69 | 13.69 | ||
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 13.69 | $ 13.69 | ||
Weighted-Average Remaining Contractual Term | ||||
Outstanding at the end of the period | 1 year 7 months 6 days | |||
Exercisable at the end of the period | 1 year 7 months 6 days | |||
Aggregate Intrinsic Value | ||||
Outstanding at the end of the period (in dollars) | $ | $ 11,007 | $ 11,007 | ||
Exercisable at the end of the period (in dollars) | $ | 11,007 | 11,007 | ||
Intrinsic value of options exercised (in dollars) | $ | $ 1,300 | $ 800 | $ 3,600 | $ 2,300 |
PSUs | ||||
Share-based compensation | ||||
Number of executives to whom the stock awards are granted | item | 2 | 2 | ||
Vesting period | 1 year | |||
Granted (in shares) | 115,000 | |||
Granted (in dollars per share) | $ / shares | $ 34.77 | |||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ | $ 2,100 | $ 2,100 | ||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 6 months |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 30, 2014 | |
Long-term Debt | ||
Long-term debt | $ 50,759 | $ 50,822 |
Current maturities of long-term debt | 136 | 129 |
Long-term debt, excluding current maturities | 50,623 | 50,693 |
Installment loan, due 2020 | ||
Long-term Debt | ||
Long-term debt | $ 759 | $ 822 |
Interest rate (as a percent) | 10.46% | 10.46% |
Revolver | ||
Long-term Debt | ||
Long-term debt | $ 50,000 | $ 50,000 |
Revolving credit facility, maximum borrowing capacity | 200,000 | |
Revolving credit facility contingent increase in maximum borrowing capacity | 200,000 | |
Revolving credit facility maximum borrowing capacity after contingent increase | $ 400,000 | |
Weighted-average interest rate (as a percent) | 3.96% | 3.96% |
Revolving credit facility, amount outstanding | $ 50,000 | |
Revolving credit facility, remaining borrowing capacity | 144,200 | |
Letters of credit outstanding | $ 5,800 | |
Debt instrument condition for additional borrowing of secured debt, based on percentage of consolidated tangible net worth | 15.00% | |
Revolver | Minimum | ||
Long-term Debt | ||
Percentage of commitment fee on unused credit facility | 0.125% | |
Revolving credit facility, fixed charge coverage ratio | 2 | |
Revolver | Maximum | ||
Long-term Debt | ||
Percentage of commitment fee on unused credit facility | 0.30% | |
Revolving credit facility, leverage ratio | 3 | |
Revolver | LIBOR | Minimum | ||
Long-term Debt | ||
Interest rate added to base rate (as a percent) | 0.875% | |
Revolver | LIBOR | Maximum | ||
Long-term Debt | ||
Interest rate added to base rate (as a percent) | 1.875% | |
Revolver | Federal Funds | ||
Long-term Debt | ||
Interest rate added to base rate (as a percent) | 0.50% | |
Revolver | Adjusted Eurodollar Rate | ||
Long-term Debt | ||
Interest rate added to base rate (as a percent) | 1.00% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jul. 01, 2014 | Jun. 30, 2015 | Jul. 01, 2014 | |
Reconciliation of the statutory federal income tax rate to the entity's effective tax rate | ||||
Tax at statutory federal rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% |
State and local tax, net of federal benefit (as a percent) | 3.50% | 3.50% | 3.50% | 3.50% |
FICA tip tax credit (as a percent) | (7.30%) | (6.50%) | (7.10%) | (5.90%) |
Work opportunity tax credit (as a percent) | (0.70%) | (0.70%) | (0.70%) | (0.60%) |
Incentive stock options (as a percent) | (0.20%) | (0.10%) | (0.20%) | (0.10%) |
Nondeductible officer compensation (as a percent) | 0.10% | 0.30% | 0.10% | 0.30% |
Net income attributable to noncontrolling interests (as a percent) | (1.20%) | (0.90%) | (1.00%) | (0.90%) |
Other (as a percent) | 0.50% | (0.80%) | 0.70% | (1.00%) |
Total (as a percent) | 29.70% | 29.80% | 30.30% | 30.30% |
Derivative and Hedging Activi33
Derivative and Hedging Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jul. 01, 2014 | Jun. 30, 2015 | Jul. 01, 2014 | Dec. 30, 2014 | |
Fair value of derivative instruments | |||||
Total Derivative Contracts | $ 697 | $ 697 | $ 1,375 | ||
Interest rate cash flow hedges | |||||
Gain recognized in AOCI, net of tax (effective portion) | 215 | $ 196 | 416 | $ 376 | |
Loss reclassified from AOCI to income (effective portion) | 367 | $ 383 | 736 | $ 740 | |
Other accrued liabilities | |||||
Fair value of derivative instruments | |||||
Fair value of Derivative Liabilities, Interest rate swaps | 697 | 697 | $ 1,375 | ||
Interest rate swap, entered October 22, 2008 | |||||
Interest rate cash flow hedges | |||||
Notional amount of interest rate swap | 25,000 | 25,000 | |||
Notional amount of hedge obligation | $ 25,000 | $ 25,000 | |||
Fixed interest rate of derivative (as a percent) | 3.83% | 3.83% | |||
Interest rate swap, entered January 7, 2009 | |||||
Interest rate cash flow hedges | |||||
Notional amount of interest rate swap | $ 25,000 | $ 25,000 | |||
Notional amount of hedge obligation | $ 25,000 | $ 25,000 | |||
Fixed interest rate of derivative (as a percent) | 2.34% | 2.34% |
Commitments and Contingencies34
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2013restaurant | Jun. 30, 2015USD ($)item | Jun. 30, 2015USD ($)item | Dec. 30, 2014USD ($)item |
Real estate lease agreements | ||||
Number of franchises with real estate lease agreements | 5 | |||
Contingently liable amount | $ | $ 17.6 | $ 17.6 | $ 18 | |
Number of leases entity contingently liable | 7 | 7 | ||
Other Commitments and Contingencies | ||||
Estimated cost to complete capital project commitments (in dollars) | $ | $ 178.7 | $ 178.7 | $ 153.2 | |
Amount of liability recorded for guarantees | $ | $ 0 | |||
Number of suppliers providing most of the company's beef | 4 | 4 | ||
Minimum age specified in age discrimination allegation against entity | 40 years | |||
Irving lease | ||||
Real estate lease agreements | ||||
Number of lease renewal terms | 3 | |||
Lease renewal term | 5 years | |||
Louisville lease | ||||
Real estate lease agreements | ||||
Number of lease renewal terms | 3 | |||
Lease renewal term | 5 years | |||
Everett, Massachusetts | ||||
Real estate lease agreements | ||||
Number of lease renewal terms | 3 | |||
Lease renewal term | 5 years | |||
Ownership percentage | 5.00% | 5.00% | ||
Longmont, Colorado | ||||
Real estate lease agreements | ||||
Number of lease renewal terms | 3 | |||
Lease renewal term | 5 years | |||
Ownership percentage | 5.00% | 5.00% | ||
Montgomeryville, Pennsylvania | ||||
Real estate lease agreements | ||||
Number of lease renewal terms | 3 | |||
Lease renewal term | 5 years | |||
Fargo, North Dakota | ||||
Real estate lease agreements | ||||
Number of lease renewal terms | 3 | |||
Lease renewal term | 5 years | |||
Ownership percentage | 5.00% | 5.00% | ||
Logan, Utah | ||||
Real estate lease agreements | ||||
Number of lease renewal terms | 3 | |||
Lease renewal term | 5 years | |||
Aspen Creek concept | ||||
Real estate lease agreements | ||||
Number of restaurants sold | restaurant | 2 |
Related Party Transactions (Det
Related Party Transactions (Details) - Franchise $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($)restaurant | Jul. 01, 2014USD ($)restaurant | Jun. 30, 2015USD ($)restaurant | Jul. 01, 2014USD ($)restaurant | Nov. 25, 2014 | |
Related Party Transactions | |||||
Number of franchise restaurants owned, in whole or part, by certain of entity's officers, directors or 5% shareholders | 80 | 75 | 80 | 75 | |
Minority-owned | |||||
Related Party Transactions | |||||
Number of franchise restaurants owned, in whole or part, by certain of entity's officers, directors or 5% shareholders | 24 | 23 | 24 | 23 | |
Ownership percentage by entity | 5.00% | ||||
Officers, directors and shareholders | |||||
Related Party Transactions | |||||
Number of franchise restaurants owned, in whole or part, by certain of entity's officers, directors or 5% shareholders | 10 | 15 | 10 | 15 | |
Fees received from franchise and license restaurants | $ | $ 0.5 | $ 0.6 | $ 0.9 | $ 1.3 | |
Number of restaurants for which the entity is contingently liable on the lease | 3 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jul. 01, 2014 | Jun. 30, 2015 | Jul. 01, 2014 | |
Earnings per share, other disclosures | ||||
Anti-dilutive securities (in shares) | 42 | 802 | ||
Earnings per share | ||||
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 21,138 | $ 23,081 | $ 53,430 | $ 49,546 |
Basic EPS: | ||||
Weighted-average common shares outstanding | 70,026,000 | 69,705,000 | 69,933,000 | 69,918,000 |
Basic EPS (in dollars per share) | $ 0.30 | $ 0.33 | $ 0.76 | $ 0.71 |
Diluted EPS: | ||||
Weighted-average common shares outstanding | 70,026,000 | 69,705,000 | 69,933,000 | 69,918,000 |
Dilutive effect of stock options and nonvested stock (in shares) | 622,000 | 872,000 | 655,000 | 904,000 |
Shares - diluted | 70,648,000 | 70,577,000 | 70,588,000 | 70,822,000 |
Diluted EPS (in dollars per share) | $ 0.30 | $ 0.33 | $ 0.76 | $ 0.70 |
Restricted Stock Units | ||||
Earnings per share, other disclosures | ||||
Anti-dilutive securities (in shares) | 42 | 802 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 30, 2014 |
Fair value of financial instruments | ||
Transfer of asset levels within the fair value hierarchy | $ 0 | |
Transfer of liability levels within the fair value hierarchy | 0 | |
Fair value measured on a recurring basis | Level 2 | ||
Fair value of financial instruments | ||
Interest rate swaps | (697) | $ (1,375) |
Fair value measured on a recurring basis | Level 1 | ||
Fair value of financial instruments | ||
Deferred compensation plan - assets | 16,937 | 14,963 |
Deferred compensation plan - liabilities | $ (16,960) | $ (14,974) |
Fair Value Measurements (Deta38
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 30, 2014 |
Carrying Amount | ||
Carrying amount and Fair value of financial instruments | ||
Installment loans | $ 759 | $ 822 |
Fair Value | Level 2 | ||
Carrying amount and Fair value of financial instruments | ||
Installment loans | $ 870 | $ 955 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jul. 01, 2014 | Jun. 30, 2015 | Jul. 01, 2014 | May. 22, 2014 | |
Stock Repurchase Program | |||||
Repurchase of common stock authorized by board of directors | $ 100 | ||||
Amount paid for repurchase of common stock | $ 3.1 | $ 7.6 | $ 3.1 | $ 31.8 | |
Number of shares repurchased | 88,089 | 300,000 | 88,089 | 1,260,000 | |
Amount remaining under authorized stock repurchase program | $ 82.3 | $ 82.3 |
Uncategorized Items - txrh-2015
Label | Element | Value |
Depreciation, Depletion and Amortization | us-gaap_DepreciationDepletionAndAmortization | $ 14,433 |
Income (Loss) from Equity Method Investments | us-gaap_IncomeLossFromEquityMethodInvestments | 353 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ 24,025 |