Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 29, 2016 | Apr. 27, 2016 | |
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 | Mar. 29, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-27 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 70,323,596 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 29, 2016 | Dec. 29, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 95,992 | $ 59,334 |
Receivables, net of allowance for doubtful accounts of $15 at March 29, 2016 and $6 at December 29, 2015 | 19,195 | 45,421 |
Inventories, net | 14,395 | 15,633 |
Prepaid income taxes | 53 | |
Prepaid expenses | 13,379 | 11,295 |
Deferred tax assets, net | 4,249 | 2,077 |
Total current assets | 147,210 | 133,813 |
Property and equipment, net of accumulated depreciation of $410,808 at March 29, 2016 and $395,886 at December 29, 2015 | 766,331 | 751,288 |
Goodwill | 116,571 | 116,571 |
Intangible assets, net of accumulated amortization of $10,886 at March 29, 2016 and $10,548 at December 29, 2015 | 4,488 | 4,827 |
Other assets | 27,014 | 26,207 |
Total assets | 1,061,614 | 1,032,706 |
Current liabilities: | ||
Current maturities of long-term debt | 147 | 144 |
Accounts payable | 50,124 | 50,996 |
Deferred revenue - gift cards | 67,546 | 101,274 |
Accrued wages | 28,018 | 36,233 |
Income taxes payable | 11,707 | 90 |
Accrued taxes and licenses | 19,220 | 18,779 |
Dividends payable | 13,358 | 11,919 |
Other accrued liabilities | 43,124 | 37,207 |
Total current liabilities | 233,244 | 256,642 |
Long-term debt, excluding current maturities | 50,512 | 25,550 |
Stock option and other deposits | 7,405 | 7,041 |
Deferred rent | 32,563 | 31,493 |
Deferred tax liabilities, net | 8,337 | 6,402 |
Other liabilities | 30,261 | 28,396 |
Total liabilities | $ 362,322 | $ 355,524 |
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, 70,315,608 and 70,091,203 shares issued and outstanding at March 29, 2016 and December 29, 2015, respectively) | $ 70 | $ 70 |
Additional paid-in-capital | 200,647 | 201,023 |
Retained earnings | 490,913 | 468,678 |
Accumulated other comprehensive loss | (93) | (109) |
Total Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 691,537 | 669,662 |
Noncontrolling interests | 7,755 | 7,520 |
Total equity | 699,292 | 677,182 |
Total liabilities and equity | $ 1,061,614 | $ 1,032,706 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 29, 2016 | Dec. 29, 2015 |
Condensed Consolidated Balance Sheets | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 15 | $ 6 |
Property and equipment, accumulated depreciation (in dollars) | 410,808 | 395,886 |
Intangible assets, accumulated amortization (in dollars) | $ 10,887 | $ 10,548 |
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 | 70,315,608 | 70,091,203 |
Common stock, shares outstanding | 70,315,608 | 70,091,203 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 29, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Restaurant sales | $ 511,284 | $ 456,293 |
Franchise royalties and fees | 4,275 | 3,937 |
Total revenue | 515,559 | 460,230 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||
Cost of sales | 173,128 | 159,980 |
Labor | 147,546 | 131,404 |
Rent | 10,027 | 8,979 |
Other operating | 77,612 | 69,317 |
Pre-opening | 4,825 | 3,818 |
Depreciation and amortization | 19,539 | 16,335 |
Impairment and closure costs | 11 | |
General and administrative | 30,060 | 21,797 |
Total costs and expenses | 462,748 | 411,630 |
Income from operations | 52,811 | 48,600 |
Interest expense, net | 305 | 515 |
Equity income from investments in unconsolidated affiliates | (352) | (372) |
Income before taxes | 52,858 | 48,457 |
Provision for income taxes | 15,857 | 14,876 |
Net income including noncontrolling interests | 37,001 | 33,581 |
Less: Net income attributable to noncontrolling interests | 1,408 | 1,289 |
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | 35,593 | 32,292 |
Other comprehensive income (expense), net of tax: | ||
Unrealized gain on derivatives, net of tax of ($18) and ($127), respectively | 27 | 201 |
Foreign currency translation adjustment, net of tax of $6 and ($7), respectively | (11) | 6 |
Total other comprehensive income, net of tax | 16 | 207 |
Total comprehensive income | $ 35,609 | $ 32,499 |
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | ||
Basic (in dollars per share) | $ 0.51 | $ 0.46 |
Diluted (in dollars per share) | $ 0.50 | $ 0.46 |
Weighted average shares outstanding: | ||
Basic (in shares) | 70,169 | 69,841 |
Diluted (in shares) | 70,764 | 70,528 |
Cash dividends declared per share (in dollars per share) | $ 0.19 | $ 0.17 |
Condensed Statements of Income
Condensed Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2016 | Mar. 31, 2015 | |
Condensed Consolidated Statements of Income and Comprehensive Income | ||
Unrealized gain on derivatives, (tax) | $ (18) | $ (127) |
Foreign currency translation adjustment, (tax)/benefit | $ 6 | $ (7) |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 29, 2016 - 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. 29, 2015 | $ 669,662 | $ 70 | $ 201,023 | $ 468,678 | $ (109) | $ 7,520 | $ 677,182 |
Balance (in shares) at Dec. 29, 2015 | 70,091,203 | 70,091,203 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 35,593 | 35,593 | 1,408 | $ 37,001 | |||
Other comprehensive income | 16 | 16 | 16 | ||||
Distributions to noncontrolling interests | (1,173) | (1,173) | |||||
Dividends declared ($0.19 per share) | (13,358) | (13,358) | (13,358) | ||||
Shares issued under share-based compensation plans including tax effects | 2,653 | 2,653 | 2,653 | ||||
Shares issued under share-based compensation plans including tax effects (in shares) | 468,182 | ||||||
Repurchase shares of common stock | (4,110) | (4,110) | (4,110) | ||||
Repurchase shares of common stock (in shares) | (114,700) | ||||||
Indirect repurchase of shares for minimum tax withholdings | (4,707) | (4,707) | (4,707) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (129,077) | ||||||
Share-based compensation | 5,788 | 5,788 | 5,788 | ||||
Balance at Mar. 29, 2016 | $ 691,537 | $ 70 | $ 200,647 | $ 490,913 | $ (93) | $ 7,755 | $ 699,292 |
Balance (in shares) at Mar. 29, 2016 | 70,315,608 | 70,315,608 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) | 3 Months Ended |
Mar. 29, 2016$ / shares | |
Condensed Consolidated Statement of Stockholders' Equity | |
Dividends declared per share (in dollars per share) | $ 0.19 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income including noncontrolling interests | $ 37,001 | $ 33,581 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 19,539 | 16,335 |
Deferred income taxes | (247) | (755) |
Loss on disposition of assets | 1,274 | 978 |
Equity income from investments in unconsolidated affiliates | (352) | (372) |
Distributions of income received from investments in unconsolidated affiliates | 136 | 155 |
Provision for doubtful accounts | (9) | (47) |
Share-based compensation expense | 5,788 | 4,904 |
Changes in operating working capital: | ||
Receivables | 26,235 | 13,063 |
Inventories | 1,238 | 1,611 |
Prepaid expenses | (2,084) | (1,048) |
Other assets | (607) | (960) |
Accounts payable | (3,008) | 520 |
Deferred revenue-gift cards | (33,728) | (27,546) |
Accrued wages | (8,215) | 4,079 |
Excess tax benefits from share-based compensation | (1,324) | (2,215) |
Prepaid income taxes and income taxes payable | 12,994 | 11,694 |
Accrued taxes and licenses | 441 | 400 |
Other accrued liabilities | 6,881 | 755 |
Deferred rent | 1,070 | 948 |
Other liabilities | 1,865 | 1,612 |
Net cash provided by operating activities | 64,888 | 57,692 |
Cash flows from investing activities: | ||
Capital expenditures-property and equipment | (34,179) | (33,437) |
Proceeds from sale of property and equipment, including insurance proceeds | 9 | |
Net cash used in investing activities | (34,179) | (33,428) |
Cash flows from financing activities: | ||
Proceeds from revolving credit facility | 25,000 | |
Repurchase of shares of common stock | (4,110) | |
Distributions to noncontrolling interests | (1,173) | (1,172) |
Excess tax benefits from share-based compensation | 1,324 | 2,215 |
Proceeds from stock option and other deposits, net | 240 | 366 |
Indirect repurchase of shares for minimum tax withholdings | (4,707) | (4,402) |
Principal payments on long-term debt | (35) | (30) |
Proceeds from exercise of stock options | 1,329 | 1,592 |
Dividends paid to shareholders | (11,919) | (10,443) |
Net cash provided by (used in) financing activities | 5,949 | (11,874) |
Net increase in cash and cash equivalents | 36,658 | 12,390 |
Cash and cash equivalents—beginning of period | 59,334 | 86,122 |
Cash and cash equivalents—end of period | 95,992 | 98,512 |
Supplemental disclosures of cash flow information: | ||
Interest paid, net of amounts capitalized | 253 | 580 |
Income taxes paid | 3,111 | 3,938 |
Capital expenditures included in current liabilities | $ 5,065 | $ 3,106 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 29, 2016 | |
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 March 29, 2016 and December 29, 2015 and for the 13 weeks ended March 29, 2016 and March 31, 2015. As of March 29, 2016, we owned and operated 408 restaurants and franchised an additional 83 restaurants in 49 states and four foreign countries. Of the 408 company-owned restaurants that were operating at March 29, 2016, 392 were wholly-owned and 16 were majority-owned. As of March 31, 2015, we owned and operated 375 restaurants and franchised an additional 79 restaurants in 49 states and four foreign countries. Of the 375 company-owned restaurants that were operating at March 31, 2015, 359 were wholly-owned and 1 6 were majority-owned. As of March 29, 2016 and March 31, 2015, we owned 5.0% to 10.0% equity interest in 24 and 23 franchise restaurants, respectively. Additionally, as of March 29, 2016 and March 31, 2015, 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 as well as the entities whose accounts have been consolidated 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, leases and leasehold improvements 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 weeks ended March 29, 2016 are not necessarily indicative of the results that may be expected for the year ending December 27, 2016. 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 29, 2015. Our significant interim accounting policies include the recognition of income taxes using an estimated annual effective tax rate. |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 29, 2016 | |
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"). This plan replaced 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 RSUs as a form of share-based compensation. A RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. A PSU is the conditional right to receive one share of common stock upon meeting a performance obligation along with the 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 March 29, 2016 March 31, 2015 Labor expense $ $ General and administrative expense Total share-based compensation expense $ $ Share-based compensation activity by type of grant as of March 29, 2016 and changes during the 13 weeks then ended are presented below. Summary Details for RSUs Weighted-Average Weighted-Average Grant Date Fair Remaining Contractual Aggregate Shares Value Term (years) Intrinsic Value Outstanding at December 29, 2015 $ Granted Forfeited Vested Outstanding at March 29, 2016 $ 1.3 $ As of March 29, 2016, with respect to unvested RSUs, there was $19.7 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1.3 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 March 29, 2016 and March 31, 2015 was $8.1 million and $13.4 million, respectively. The excess tax benefit realized from tax deductions associated with vested restricted stock units for the 13 weeks ended March 29, 2016 and March 31, 2015 was $0.3 million and $1.5 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 certain earnings targets, which determine the number of units to vest at the end of the vesting period. 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 vest after meeting the performance and service conditions. On January 8, 2015 we granted PSUs with a grant date fair value of approximately $4.0 million based on the grant date price per share of $34.77 . On January 8, 2016, 144,000 shares vested related to this PSU grant and were distributed during the 13 weeks ended March 29, 2016. On November 19, 2015, we granted PSUs with a grant date fair value of approximately $3.9 million based on the grant date price per share of $34.11 . As of March 29, 2016, with respect to unvested PSUs, there was $3.1 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 0.8 years. The distribution of vested performance stock units as common stock related to the November 19, 2015 grants will occur in the first quarter of 2017. Summary Details for Stock Options Weighted- Weighted-Average Average Exercise Remaining Contractual Aggregate Shares Price Term (years) Intrinsic Value Outstanding at December 29, 2015 $ Granted — — Forfeited — — Exercised Outstanding at March 29, 2016 $ 1.0 $ Exercisable at March 29, 2016 $ 1.0 $ The total intrinsic value of options exercised during the 13 weeks ended March 29, 2016 and March 31, 2015 was $3.3 million and $2.2 million, respectively. No stock options vested during the 13 weeks ended March 29, 2016 or March 31, 2015. For the 13 weeks ended March 29, 2016 and March 31, 2015, cash received before tax withholdings from options exercised was $1.3 million and $1.6 million, respectively. The excess tax benefit realized from deductions associated with options exercised for the 13 weeks ended March 29, 2016 and March 31, 2015 was $1.0 million and $0.7 million, respectively. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 29, 2016 | |
Long-term Debt | |
Long-term Debt | (3) Long-term Debt Long-term debt consisted of the following: March 29, December 29, 2016 2015 Installment loan, due 2020 $ $ Revolver Less current maturities $ $ The interest rate for our installment loan outstanding at both March 29, 2016 and December 29, 2015 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 amended revolving credit facility at March 29, 2016 and December 29, 2015 was 1.31% and 3.22 %, respectively, including the impact of an interest rate swap which expired on January 7, 2016. At March 29, 2016, we had $50.0 million outstanding under th e revolving credit facility and $143.4 million of availability, net of $6.6 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 financial covenants as of March 29, 2016. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 29, 2016 | |
Income Taxes | |
Income Taxes | (4) Income Taxes A reconciliation of the statutory federal income tax rate to our effective tax rate for the 13 weeks ended March 29, 2016 and March 31, 2015 is as follows: 13 Weeks Ended March 29, 2016 March 31, 2015 Tax at statutory federal rate % % State and local tax, net of federal benefit FICA tip tax credit Work opportunity tax credit Net income attributable to noncontrolling interests Other Total % % |
Derivative and Hedging Activiti
Derivative and Hedging Activities | 3 Months Ended |
Mar. 29, 2016 | |
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. 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 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 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 paid a fixed rate of 2.34% on the $25.0 million notional amount and received payments from the counterparty based on the one month LIBOR for a term that ended 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 swap 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 swap were reported as a component of accumulated other comprehensive income or loss ("AOCI"). Additionally, amounts related to the yield adjustment of the hedged interest payments were subsequently reclassified into interest expense in the same period during which the related interest affected earnings. We reclassified a 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 the interest rate swap expired on January 7, 2016. See note 10 for fair value discussion of this interest rate swap. The following table summarizes the fair value and presentation in the unaudited condensed consolidated balance sheets for derivatives designated as hedging instruments under ASC 815: Derivative Assets Derivative Liabilities Balance Sheet March 29, December 29, March 29, December 29, Location 2016 2015 2016 2015 Derivative Contracts Designated as Hedging Instruments under ASC 815 (1) Interest rate swaps $ — $ — $ — $ Total Derivative Contracts $ — $ — $ — $ (1) As of December 29, 2015, a derivative liability was included in other accrued liabilities on the balance sheet. 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 weeks ended March 29, 2016 and March 31, 2015: 13 Weeks Ended March 29, 2016 March 31, 2015 Gain recognized in AOCI, net of tax (effective portion) (1) $ $ Loss reclassified from AOCI to income (effective portion) (1) $ $ (1) The 13 weeks ended March 29, 2016 included the effect of one interest rate swap which expired on January 7, 2016, while the 13 weeks ended March 31, 2015 included the effect of two interest rate swaps, one of which expired on November 7, 2015. 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 weeks ended March 29, 2016 and March 31, 2015, 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 | 3 Months Ended |
Mar. 29, 2016 | |
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. In March and April 2016, the FASB issued the following amendments to clarify the implementation guidance: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) and ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606); Identifying Performance Obligations and Licensing. The standard will not impact our recognition of revenue from company-owned restaurants or our recognition of continuing fees from franchisees, which are based on a percentage of franchise sales. We are continuing to evaluate the impact of the adoption of this standard will have on the recognition of other less significant revenue transactions such as initial fees from franchisees. Inventory (Accounting Standards Update 2015-11, "ASU 2015-11") In July 2015, the FASB issued ASU 2015-11, Inventory , which simplifies the measurement principle of inventories valued under the First-In, First-Out ("FIFO") or weighted average methods from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 is effective for reporting periods beginning after December 15, 2016 (our 2017 fiscal year). We do not expect the standard to have a material impact on our consolidated financial position, results of operations or cash flows upon adoption. Deferred Taxes (Accounting Standards Update 2015-17, "ASU 2015-17") In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which requires that deferred tax assets and liabilities be classified as noncurrent on the consolidated balance sheet. ASU 2015-17 is effective for annual periods beginning after December 15, 2016 (our 2017 fiscal year), including interim periods within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. Upon adoption, ASU 2015-17 may be applied either prospectively or retrospectively. We do not expect the adoption of this guidance to have a material impact on our consolidated financial position, results of operations or cash flows. Leases (Accounting Standards Update 2016-02, "ASU 2016-02") In February 2016, the FASB issued ASU 2016-02, Leases , which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. This update also requires additional disclosures about the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 (our 2019 fiscal year). Early adoption is permitted. A modified retrospective approach is required for all leases existing or entered into after the beginning of the earliest comparative period in the consolidated financial statements. We are currently assessing the impact of this new standard on our consolidated financial position, results of operations and cash flows and we have not determined the effect of the amended guidance on our ongoing financial reporting. Share-Based Compensation (Accounting Standards Update 2016-09, "ASU 2016-09") In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which is intended to simplify several aspects of the accounting for share-based payment transactions. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 (our 2017 fiscal year) and interim periods within those annual periods. Early adoption is permitted. We are currently assessing the impact of this new standard on our consolidated financial position, results of operations and cash flows. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 29, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | (7) Commitments and Contingencies The estimated cost of completing capital project commitments at March 29, 2016 and December 29, 2015 was approximately $157.5 million and $129.4 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. We entered into real estate lease agreements for five restaurant locations, 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 October 2003 May 2019 Montgomeryville, Pennsylvania October 2004 June 2021 Fargo, North Dakota(1) February 2006 July 2021 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 of March 29, 2016 and December 29, 2015, we are contingently liable for $17.0 million and $17.2 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 March 29, 2016 and December 29, 2015 as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant. During the 13 weeks ended March 29, 2016, we bought most of our beef from three 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 and 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, the case is in discovery and we are preparing for trial in 2017. We deny liability and are vigorously defending this case; 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. On March 1, 2016, we entered into a binding Term Sheet to resolve alleged violations of the federal Fair Labor Standards Act asserted on behalf of a purported class of employees. Once the settlement agreement is finalized, it will be subject to court approval. To cover the estimated costs of the settlement, including estimated payments to any opt-in members and class attorneys, as well as related settlement administration costs, we recorded a charge of $5.5 million ($3.4 million after-tax) during the 13 weeks ended March 29, 2016. The charge is recorded in general and administrative expenses in our unaudited condensed consolidated statements of income and comprehensive income. The actual amount of any settlement payment could vary from our estimate and will be subject to many factors including approval by the court, the claims process, and other matters typically associated with the settlement of class action litigation. 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 | 3 Months Ended |
Mar. 29, 2016 | |
Related Party Transactions | |
Related Party Transactions | (8) Related Party Transactions As of March 29, 2016 and March 31, 2015, we had 10 franchise restaurants owned in whole or part, by certain of our officers, directors and 5% stockholders of the company. For both of the 13 week periods ended March 29, 2016 and March 31, 2015, these entities paid us fees of approximately $0.5 million. As disclosed in note 7, we are contingently liable on leases which are related to two of these restaurants. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 29, 2016 | |
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 March 29, 2016 March 31, 2015 Nonvested stock Options — — Total PSUs are not included in the diluted earnings per share calculation until the performance-based criteria have been met. See note 2 for further discussion of PSUs. The following table sets forth the calculation of earnings per share and weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended March 29, 2016 March 31, 2015 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 nonvested stock Shares-diluted Diluted EPS $ $ |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 29, 2016 | |
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 weeks ended March 29, 2016. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level March 29, 2016 December 29, 2015 Interest rate swap 2 $ — $ Deferred compensation plan—assets 1 Deferred compensation plan—liabilities 1 As of December 29, 2015, the fair value of our interest rate swap was 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 swap, which expired on January 7, 2016. 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 other assets and the corresponding liability in other liabilities in our unaudited condensed consolidated financial statements. These investments are considered trading securities and are reported at fair value based on third-party broker statements. 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 March 29, 2016 and December 29, 2015, 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 amended revolving credit facility at March 29, 2016 and December 29, 2015 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: March 29, 2016 December 29, 2015 Carrying Fair Carrying Fair Amount Value Amount Value Installment loan—Level 2 $ $ $ $ |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 29, 2016 | |
AOCI Attributable to Parent [Abstract] | |
Accumulated Other Comprehensive Loss | (11) Accumulated Other Comprehensive Loss The components of the changes in accumulated other comprehensive loss for the 13 weeks ended March 29, 2016 were as follows: Cash Flow Hedges Foreign Currency Translation Accumulated Other Comprehensive Loss Balance as of December 29, 2015 $ $ $ Other comprehensive loss before reclassifications — Reclassification adjustments to income (1) — Income taxes Balance as of March 29, 2016 $ — $ $ (1) For further discussion of amounts reclassified to income, see note 5. |
Stock Repurchase Program
Stock Repurchase Program | 3 Months Ended |
Mar. 29, 2016 | |
Stock Repurchase Program | |
Stock Repurchase Program | (12) 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 an evaluation of our stock price, market conditions and other corporate considerations. For the 13 week period ended March 29, 2016 we paid approximately $ 4.1 million to repurchase 114,700 shares of our common stock. As of March 29, 2016, we had approximately $69.9 million remaining under our authorized stock repurchase program . We did not repurchase any shares of common stock during the 13 week period ended March 31, 2015. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 29, 2016 | |
Share-based Compensation | |
Summary of allocation of share-based compensation expense | 13 Weeks Ended March 29, 2016 March 31, 2015 Labor expense $ $ General and administrative expense Total share-based compensation expense $ $ |
Summary of restricted stock unit activity | Weighted-Average Weighted-Average Grant Date Fair Remaining Contractual Aggregate Shares Value Term (years) Intrinsic Value Outstanding at December 29, 2015 $ Granted Forfeited Vested Outstanding at March 29, 2016 $ 1.3 $ |
Summary of stock option activity | Weighted- Weighted-Average Average Exercise Remaining Contractual Aggregate Shares Price Term (years) Intrinsic Value Outstanding at December 29, 2015 $ Granted — — Forfeited — — Exercised Outstanding at March 29, 2016 $ 1.0 $ Exercisable at March 29, 2016 $ 1.0 $ |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 29, 2016 | |
Long-term Debt | |
Schedule of long-term debt | March 29, December 29, 2016 2015 Installment loan, due 2020 $ $ Revolver Less current maturities $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 29, 2016 | |
Income Taxes | |
Schedule of reconciliation of the statutory federal income tax rate to the entity's effective tax rate | 13 Weeks Ended March 29, 2016 March 31, 2015 Tax at statutory federal rate % % State and local tax, net of federal benefit FICA tip tax credit Work opportunity tax credit Net income attributable to noncontrolling interests Other Total % % |
Derivative and Hedging Activi24
Derivative and Hedging Activities (Tables) | 3 Months Ended |
Mar. 29, 2016 | |
Derivative and Hedging Activities | |
Summary of fair value presentation of derivative instruments designated as hedging instrument | Derivative Assets Derivative Liabilities Balance Sheet March 29, December 29, March 29, December 29, Location 2016 2015 2016 2015 Derivative Contracts Designated as Hedging Instruments under ASC 815 (1) Interest rate swaps $ — $ — $ — $ Total Derivative Contracts $ — $ — $ — $ (1) As of December 29, 2015, a derivative liability was included in other accrued liabilities on the balance sheet. |
Summary of effect of interest rate swaps in the consolidated statements of income and comprehensive income | 13 Weeks Ended March 29, 2016 March 31, 2015 Gain recognized in AOCI, net of tax (effective portion) (1) $ $ Loss reclassified from AOCI to income (effective portion) (1) $ $ (1) The 13 weeks ended March 29, 2016 included the effect of one interest rate swap which expired on January 7, 2016, while the 13 weeks ended March 31, 2015 included the effect of two interest rate swaps, one of which expired on November 7, 2015. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 29, 2016 | |
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 October 2003 May 2019 Montgomeryville, Pennsylvania October 2004 June 2021 Fargo, North Dakota(1) February 2006 July 2021 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) | 3 Months Ended |
Mar. 29, 2016 | |
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 March 29, 2016 March 31, 2015 Nonvested stock Options — — Total |
Schedule of calculation of earnings per share and weighted-average shares outstanding | The following table sets forth the calculation of earnings per share and weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended March 29, 2016 March 31, 2015 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 nonvested stock Shares-diluted Diluted EPS $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 29, 2016 | |
Fair Value Measurements | |
Schedule of fair value of assets and liabilities measured on a recurring basis | Fair Value Measurements Level March 29, 2016 December 29, 2015 Interest rate swap 2 $ — $ Deferred compensation plan—assets 1 Deferred compensation plan—liabilities 1 |
Schedule of carrying amounts and related estimated fair values for installment loan | March 29, 2016 December 29, 2015 Carrying Fair Carrying Fair Amount Value Amount Value Installment loan—Level 2 $ $ $ $ |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 29, 2016 | |
AOCI Attributable to Parent [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Cash Flow Hedges Foreign Currency Translation Accumulated Other Comprehensive Loss Balance as of December 29, 2015 $ $ $ Other comprehensive loss before reclassifications — Reclassification adjustments to income (1) — Income taxes Balance as of March 29, 2016 $ — $ $ For further discussion of amounts reclassified to income, see note 5. |
Basis of Presentation (Details)
Basis of Presentation (Details) | Mar. 29, 2016restaurantitem | Dec. 29, 2015 | Mar. 31, 2015restaurantitem |
Description of Business | |||
Number of states in which restaurants operate | item | 49 | 49 | |
Number of countries in which restaurants operate | item | 4 | 4 | |
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 | 408 | 375 | |
Company-owned | Wholly-owned | |||
Description of Business | |||
Number of restaurants | 392 | 359 | |
Company-owned | Majority-owned | |||
Description of Business | |||
Number of restaurants | 16 | 16 | |
Franchise | |||
Description of Business | |||
Number of restaurants | 83 | 79 | |
Franchise | Minority-owned | |||
Description of Business | |||
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 | |
Mar. 29, 2016 | Mar. 31, 2015 | |
Share-based compensation expenses | ||
Number of common shares that a holder would receive upon satisfaction of the vesting requirement (in shares) | 1 | |
Number of common shares that a holder would receive upon meeting a performance obligation and vesting requirement (in shares) | 1 | |
Share-based compensation expense | $ 5,788 | $ 4,904 |
Labor expense | ||
Share-based compensation expenses | ||
Share-based compensation expense | 1,399 | 1,515 |
General and administrative expense | ||
Share-based compensation expenses | ||
Share-based compensation expense | $ 4,389 | $ 3,389 |
Share-based Compensation (Restr
Share-based Compensation (Restricted Stock and PSU (Details) $ / shares in Units, $ in Thousands | Jan. 08, 2016shares | Nov. 19, 2015USD ($)$ / shares | Jan. 08, 2015USD ($)$ / shares | Mar. 29, 2016USD ($)$ / sharesshares | Mar. 31, 2015USD ($) | Dec. 29, 2015item$ / sharesshares |
Restricted Stock Units | ||||||
Restricted Stock Units, Shares | ||||||
Outstanding at the beginning of the period (in shares) | shares | 984,586 | |||||
Granted (in shares) | shares | 160,290 | |||||
Forfeited (in shares) | shares | (2,255) | |||||
Vested (in shares) | shares | (212,561) | |||||
Outstanding at the end of period (in shares) | shares | 930,060 | 984,586 | ||||
Restricted Stock Units, Weighted-Average Grant Date Fair Value | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 32.86 | |||||
Granted (in dollars per share) | $ / shares | 40.22 | |||||
Forfeited (in dollars per share) | $ / shares | 30.25 | |||||
Vested (in dollars per share) | $ / shares | 33.91 | |||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 33.85 | $ 32.86 | ||||
Weighted-Average Remaining Contractual Term (years) | ||||||
Weighted-Average Remaining Contractual Term | 1 year 3 months 18 days | |||||
Aggregate Intrinsic Value | ||||||
Outstanding at the end of the period (in dollars) | $ | $ 40,565 | |||||
Intrinsic value of awards vested (in dollars) | $ | 8,100 | $ 13,400 | ||||
Unrecognized compensation cost | ||||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ | $ 19,700 | |||||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 1 year 3 months 18 days | |||||
Share-based Compensation, other disclosures | ||||||
Excess tax benefit realized from tax deductions that vested | $ | $ 300 | $ 1,500 | ||||
Restricted Stock Units | Minimum | ||||||
Share-based compensation | ||||||
Vesting period | 1 year | |||||
Restricted Stock Units | Maximum | ||||||
Share-based compensation | ||||||
Vesting period | 5 years | |||||
PSUs | ||||||
Share-based compensation | ||||||
Number of executives included in plan | item | 2 | |||||
Vesting period | 1 year | |||||
Restricted Stock Units, Shares | ||||||
Vested (in shares) | shares | (144,000) | |||||
Restricted Stock Units, Weighted-Average Grant Date Fair Value | ||||||
Granted (in dollars per share) | $ / shares | $ 34.11 | $ 34.77 | ||||
Unrecognized compensation cost | ||||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ | $ 3,100 | |||||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 9 months 18 days | |||||
Share-based Compensation, other disclosures | ||||||
Grant date fair value | $ | $ 3,900 | $ 4,000 |
Share-based Compensation (Optio
Share-based Compensation (Options) (Details) - Options - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2016 | Mar. 31, 2015 | Dec. 29, 2015 | |
Shares | |||
Outstanding at the beginning of the period (in shares) | 328,498 | ||
Exercised (in shares) | (111,621) | ||
Outstanding at the end of the period (in shares) | 216,877 | 328,498 | |
Exercisable at the end of period (in shares) | 216,877 | ||
Stock options vested (in shares) | 0 | 0 | |
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 13.10 | ||
Exercised (in dollars per share) | 11.91 | ||
Outstanding at the end of the period (in dollars per share) | 13.71 | $ 13.10 | |
Exercisable at the end of the period (in dollars per share) | $ 13.71 | ||
Weighted-Average Remaining Contractual Term | |||
Outstanding at the end of the period | 1 year | ||
Exercisable at the end of the period | 1 year | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period (in dollars) | $ 6,482 | ||
Exercisable at the end of the period (in dollars) | 6,482 | ||
Intrinsic value of options exercised (in dollars) | 3,300 | $ 2,200 | |
Cash received before tax withholdings from options exercised | 1,300 | 1,600 | |
Excess tax benefit realized from tax deductions associated with options exercised | $ 1,000 | $ 700 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2016 | Dec. 29, 2015 | |
Long-term Debt | ||
Long-term debt | $ 50,659 | $ 25,694 |
Current maturities of long-term debt | 147 | 144 |
Long-term debt, excluding current maturities | 50,512 | 25,550 |
Installment loan, due 2020 | ||
Long-term Debt | ||
Long-term debt | $ 659 | $ 694 |
Interest rate (as a percent) | 10.46% | 10.46% |
Revolver | ||
Long-term Debt | ||
Long-term debt | $ 50,000 | $ 25,000 |
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) | 1.31% | 3.22% |
Revolving credit facility, amount outstanding | $ 50,000 | |
Revolving credit facility, remaining borrowing capacity | 143,400 | |
Letters of credit outstanding | $ 6,600 | |
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 one-month 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 | |
Mar. 29, 2016 | Mar. 31, 2015 | |
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% |
State and local tax, net of federal benefit (as a percent) | 3.50% | 3.50% |
FICA tip tax credit (as a percent) | (7.00%) | (7.00%) |
Work opportunity tax credit (as a percent) | (0.70%) | (0.70%) |
Net income attributable to noncontrolling interests (as a percent) | (0.90%) | (0.90%) |
Other (as a percent) | 0.10% | 0.80% |
Total (as a percent) | 30.00% | 30.70% |
Derivative and Hedging Activi35
Derivative and Hedging Activities (Details) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2016USD ($)derivative | Mar. 31, 2015USD ($)derivative | Dec. 29, 2015USD ($) | |
Fair value of derivative instruments | |||
Fair value of Derivative Liabilities, Interest rate swaps | $ 45 | ||
Total Derivative Contracts | $ 45 | ||
Interest rate cash flow hedges | |||
Gain recognized in AOCI, net of tax (effective portion) | $ 27 | $ 201 | |
Loss reclassified from AOCI to income (effective portion) | $ 45 | $ 369 | |
Number of interest rate swaps with activity during the period which have expired | derivative | 1 | 1 | |
Number of interest rate swaps with activity during the period | derivative | 2 | ||
Interest rate swap, entered January 7, 2009 | |||
Interest Rate Swaps | |||
Notional amount of interest rate swap | $ 25,000 | ||
Notional amount of hedge obligation | $ 25,000 | ||
Fixed interest rate of derivative (as a percent) | 2.34% |
Commitments and Contingencies36
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2013restaurant | Mar. 29, 2016USD ($)item | Dec. 29, 2015USD ($)item |
Other Commitments and Contingencies | |||
Estimated cost to complete capital project commitments (in dollars) | $ | $ 157.5 | $ 129.4 | |
Number of suppliers providing most of the company's beef | 3 | ||
Minimum age specified in age discrimination allegation against entity | 40 years | ||
Real estate lease agreements | |||
Number of restaurant locations with real estate lease agreements | 5 | ||
Contingently liable amount, maximum | $ | $ 17 | $ 17.2 | |
Number of leases entity contingently liable | 7 | 7 | |
Fair Labor Standards Act Class of Employees Claim | General and administrative expense | |||
Other Commitments and Contingencies | |||
Estimated loss contingency recorded during period | $ | $ 5.5 | ||
Estimated loss contingency, net of tax | $ | $ 3.4 | ||
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% | ||
Longmont, Colorado | |||
Real estate lease agreements | |||
Number of lease renewal terms | 3 | ||
Lease renewal term | 5 years | ||
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% | ||
Logan, Utah | |||
Real estate lease agreements | |||
Number of lease renewal terms | 3 | ||
Lease renewal term | 5 years | ||
Aspen Creek concept | Disposed of by Sale | |||
Real estate lease agreements | |||
Number of restaurants sold | restaurant | 2 |
Related Party Transactions (Det
Related Party Transactions (Details) - Franchise $ in Millions | 3 Months Ended | |
Mar. 29, 2016USD ($)restaurant | Mar. 31, 2015USD ($)restaurant | |
Related Party Transactions | ||
Number of franchise restaurants | 83 | 79 |
Officers, directors and shareholders | ||
Related Party Transactions | ||
Number of franchise restaurants | 10 | 10 |
Ownership percentage by entity | 5.00% | 5.00% |
Fees received from franchise and license restaurants | $ | $ 0.5 | $ 0.5 |
Number of restaurants for which the entity is contingently liable on the lease | 2 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 29, 2016 | Mar. 31, 2015 | |
Antidilutive securities | ||
Anti-dilutive securities (in shares) | 38,180 | 10,230 |
Earnings per share | ||
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 35,593 | $ 32,292 |
Basic EPS: | ||
Weighted-average common shares outstanding (in shares) | 70,169,000 | 69,841,000 |
Basic EPS (in dollars per share) | $ 0.51 | $ 0.46 |
Diluted EPS: | ||
Weighted-average common shares outstanding (in shares) | 70,169,000 | 69,841,000 |
Dilutive effect of stock options and nonvested stock (in shares) | 595,000 | 687,000 |
Shares - diluted (in shares) | 70,764,000 | 70,528,000 |
Diluted EPS (in dollars per share) | $ 0.50 | $ 0.46 |
Restricted Stock Units | ||
Antidilutive securities | ||
Anti-dilutive securities (in shares) | 38,180 | 10,230 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 29, 2016 | Dec. 29, 2015 |
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 | |
Interest rate swap | $ (45) | |
Fair value measured on a recurring basis | Level 2 | ||
Fair value of financial instruments | ||
Interest rate swap | (45) | |
Fair value measured on a recurring basis | Level 1 | ||
Fair value of financial instruments | ||
Deferred compensation plan - assets | 18,460 | 17,401 |
Deferred compensation plan - liabilities | $ (18,466) | $ (17,416) |
Fair Value Measurements (Instal
Fair Value Measurements (Installment Loan) (Details) - USD ($) $ in Thousands | Mar. 29, 2016 | Dec. 29, 2015 |
Carrying amount and Fair value of financial instruments | ||
Installment loan | $ 50,659 | $ 25,694 |
Carrying Amount | ||
Carrying amount and Fair value of financial instruments | ||
Installment loan | 659 | 694 |
Fair Value | Level 2 | ||
Carrying amount and Fair value of financial instruments | ||
Installment loan | $ 736 | $ 779 |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Loss (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2016USD ($) | |
Accumulated Other Comprehensive Loss | |
Balance as of beginning of period | $ 669,662 |
Balance as of end of period | 691,537 |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | |
Balance as of beginning of period | (109) |
Other comprehensive loss before reclassification | (17) |
Reclassification adjustments to income (1) | 45 |
Income taxes | (12) |
Balance as of end of period | (93) |
Cash Flow Hedges | |
Accumulated Other Comprehensive Loss | |
Balance as of beginning of period | (27) |
Reclassification adjustments to income (1) | 45 |
Income taxes | (18) |
Foreign Currency Translation | |
Accumulated Other Comprehensive Loss | |
Balance as of beginning of period | (82) |
Other comprehensive loss before reclassification | (17) |
Income taxes | 6 |
Balance as of end of period | $ (93) |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2016 | May. 22, 2014 | |
Stock Repurchase Program | ||
Repurchase of common stock authorized by board of directors | $ 100 | |
Amount paid for repurchase of common stock | $ 4.1 | |
Number of shares repurchased | 114,700 | |
Amount remaining under authorized stock repurchase program | $ 69.9 |