Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 26, 2017 | Oct. 25, 2017 | |
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 | Sep. 26, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-26 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 71,106,215 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 26, 2017 | Dec. 27, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 114,436 | $ 112,944 |
Receivables, net of allowance for doubtful accounts of $52 at September 26, 2017 and $33 at December 27, 2016 | 24,979 | 56,127 |
Inventories, net | 15,453 | 16,088 |
Prepaid income taxes | 954 | |
Prepaid expenses | 10,461 | 12,150 |
Deferred tax assets, net | 1,996 | |
Total current assets | 165,329 | 200,259 |
Property and equipment, net of accumulated depreciation of $512,061 at September 26, 2017 and $457,102 at December 27, 2016 | 886,972 | 830,054 |
Goodwill | 121,040 | 116,571 |
Intangible assets, net of accumulated amortization of $12,445 at September 26, 2017 and $11,753 at December 27, 2016 | 2,930 | 3,622 |
Other assets | 36,448 | 29,465 |
Total assets | 1,212,719 | 1,179,971 |
Current liabilities: | ||
Current maturities of long-term debt and obligation under capital lease | 9 | 167 |
Accounts payable | 48,979 | 50,789 |
Deferred revenue-gift cards | 70,648 | 129,558 |
Accrued wages | 29,580 | 26,039 |
Income taxes payable | 8,581 | |
Accrued taxes and licenses | 23,483 | 19,698 |
Dividends payable | 14,931 | 13,418 |
Other accrued liabilities | 42,058 | 39,858 |
Total current liabilities | 238,269 | 279,527 |
Long-term debt and obligation under capital lease, excluding current maturities | 51,984 | 52,381 |
Stock option and other deposits | 7,549 | 7,491 |
Deferred rent | 40,261 | 36,103 |
Deferred tax liabilities, net | 4,707 | 12,268 |
Other liabilities | 39,157 | 33,959 |
Total liabilities | 381,927 | 421,729 |
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, 71,101,654 and 70,619,737 shares issued and outstanding at September 26, 2017 and December 27, 2016, respectively) | 71 | 71 |
Additional paid-in-capital | 229,909 | 219,626 |
Retained earnings | 588,826 | 530,723 |
Accumulated other comprehensive loss | (63) | (194) |
Total Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 818,743 | 750,226 |
Noncontrolling interests | 12,049 | 8,016 |
Total equity | 830,792 | 758,242 |
Total liabilities and equity | $ 1,212,719 | $ 1,179,971 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 26, 2017 | Dec. 27, 2016 |
Condensed Consolidated Balance Sheets | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 52 | $ 33 |
Property and equipment, accumulated depreciation (in dollars) | 512,061 | 457,102 |
Intangible assets, accumulated amortization (in dollars) | $ 12,445 | $ 11,753 |
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 | 71,101,654 | 70,619,737 |
Common stock, shares outstanding | 71,101,654 | 70,619,737 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2017 | Sep. 27, 2016 | Sep. 26, 2017 | Sep. 27, 2016 | |
Revenue: | ||||
Restaurant sales | $ 536,341 | $ 477,617 | $ 1,661,821 | $ 1,493,531 |
Franchise royalties and fees | 4,166 | 4,020 | 12,634 | 12,473 |
Total revenue | 540,507 | 481,637 | 1,674,455 | 1,506,004 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||||
Cost of sales | 176,498 | 161,886 | 545,862 | 506,565 |
Labor | 169,355 | 145,301 | 514,287 | 442,861 |
Rent | 11,257 | 10,266 | 33,238 | 30,477 |
Other operating | 83,679 | 73,583 | 254,176 | 227,082 |
Pre-opening | 4,548 | 5,017 | 14,302 | 14,253 |
Depreciation and amortization | 23,534 | 20,941 | 69,236 | 60,718 |
Impairment and closure | 2 | 13 | 13 | 54 |
General and administrative | 26,123 | 26,162 | 94,594 | 82,933 |
Total costs and expenses | 494,996 | 443,169 | 1,525,708 | 1,364,943 |
Income from operations | 45,511 | 38,468 | 148,747 | 141,061 |
Interest expense, net | 500 | 288 | 1,211 | 902 |
Equity income from investments in unconsolidated affiliates | (359) | (4) | (1,149) | (831) |
Income before taxes | 45,370 | 38,184 | 148,685 | 140,990 |
Provision for income taxes | 13,046 | 11,381 | 41,159 | 42,325 |
Net income including noncontrolling interests | 32,324 | 26,803 | 107,526 | 98,665 |
Less: Net income attributable to noncontrolling interests | 1,310 | 1,128 | 4,618 | 3,792 |
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | 31,014 | 25,675 | 102,908 | 94,873 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized gain on derivatives, net of tax of ($-), ($-), ($-) and ($18), respectively | 27 | |||
Foreign currency translation adjustment, net of tax of ($55), ($18), ($82) and $7, respectively | 88 | 29 | 131 | (11) |
Total other comprehensive income, net of tax | 88 | 29 | 131 | 16 |
Total comprehensive income | $ 31,102 | $ 25,704 | $ 103,039 | $ 94,889 |
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | ||||
Basic (in dollars per share) | $ 0.44 | $ 0.36 | $ 1.45 | $ 1.35 |
Diluted (in dollars per share) | $ 0.43 | $ 0.36 | $ 1.44 | $ 1.34 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 71,067 | 70,477 | 70,939 | 70,338 |
Diluted (in shares) | 71,532 | 70,981 | 71,449 | 70,898 |
Cash dividends declared per share (in dollars per share) | $ 0.21 | $ 0.19 | $ 0.63 | $ 0.57 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2017 | Sep. 27, 2016 | Sep. 26, 2017 | Sep. 27, 2016 | |
Condensed Consolidated Statements of Income and Comprehensive Income | ||||
Unrealized gain on derivatives, (tax) | $ (18) | |||
Foreign currency translation adjustment, (tax)/benefit | $ (55) | $ (18) | $ (82) | $ 7 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 26, 2017 - 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. 27, 2016 | $ 750,226 | $ 71 | $ 219,626 | $ 530,723 | $ (194) | $ 8,016 | $ 758,242 |
Balance (in shares) at Dec. 27, 2016 | 70,619,737 | 70,619,737 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 102,908 | 102,908 | 4,618 | $ 107,526 | |||
Other comprehensive income, net | 131 | 131 | 131 | ||||
Noncontrolling interests liquidation adjustments | 3,457 | 3,457 | |||||
Distributions to noncontrolling interests holders | (4,042) | (4,042) | |||||
Dividends declared and paid ($0.21 per share) | (29,805) | (29,805) | (29,805) | ||||
Dividends declared ($0.21 per share) | (14,931) | (14,931) | (14,931) | ||||
Shares issued under share-based compensation plans | 1,485 | $ 1 | 1,484 | 1,485 | |||
Shares issued under share-based compensation plans (in shares) | 701,827 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (10,097) | $ (1) | (10,096) | (10,097) | |||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (219,910) | ||||||
Cumulative effect of change in accounting principle | 69 | (69) | |||||
Share-based compensation | 18,826 | 18,826 | 18,826 | ||||
Balance at Sep. 26, 2017 | $ 818,743 | $ 71 | $ 229,909 | $ 588,826 | $ (63) | $ 12,049 | $ 830,792 |
Balance (in shares) at Sep. 26, 2017 | 71,101,654 | 71,101,654 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) | 9 Months Ended |
Sep. 26, 2017$ / shares | |
Condensed Consolidated Statement of Stockholders' Equity | |
Dividends declared and paid per share (in dollars per share) | $ 0.42 |
Dividends declared per share (in dollars per share) | $ 0.21 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 26, 2017 | Sep. 27, 2016 | |
Cash flows from operating activities: | ||
Net income including noncontrolling interests | $ 107,526 | $ 98,665 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 69,236 | 60,718 |
Deferred income taxes | (5,647) | (3,270) |
Loss on disposition of assets | 3,490 | 3,509 |
Impairment and closure costs | 139 | |
Equity income from investments in unconsolidated affiliates | (1,149) | (831) |
Distributions of income received from investments in unconsolidated affiliates | 585 | 1,765 |
Provision for doubtful accounts | 19 | 9 |
Share-based compensation expense | 18,826 | 18,347 |
Changes in operating working capital: | ||
Receivables | 31,129 | 23,373 |
Inventories | 805 | 1,276 |
Prepaid expenses | 1,689 | 1,985 |
Other assets | (5,729) | (3,003) |
Accounts payable | (3,162) | (9,352) |
Deferred revenue-gift cards | (59,302) | (46,146) |
Accrued wages | 3,541 | (8,471) |
Excess tax benefits from share-based compensation | (2,698) | |
Prepaid income taxes and income taxes payable | 9,535 | 9,760 |
Accrued taxes and licenses | 3,785 | 1,698 |
Other accrued liabilities | 3,536 | 5,594 |
Deferred rent | 4,158 | 3,412 |
Other liabilities | 5,199 | 3,303 |
Net cash provided by operating activities | 188,070 | 159,782 |
Cash flows from investing activities: | ||
Capital expenditures-property and equipment | (117,037) | (113,219) |
Acquisition of franchise restaurants, net of cash acquired | (16,528) | |
Net cash used in investing activities | (133,565) | (113,219) |
Cash flows from financing activities: | ||
Proceeds from revolving credit facility, net | 25,000 | |
Debt issuance costs | (476) | |
Proceeds from noncontrolling interest contribution | 3,457 | |
Repurchase of shares of common stock | 0 | (4,110) |
Distributions to noncontrolling interest holders | (4,042) | (3,538) |
Excess tax benefits from share-based compensation | 2,698 | |
Proceeds from stock option and other deposits, net | 438 | 283 |
Indirect repurchase of shares for minimum tax withholdings | (10,097) | (7,927) |
Principal payments on long-term debt and capital lease obligation | (555) | (106) |
Proceeds from exercise of stock options | 1,485 | 2,172 |
Dividends paid to shareholders | (43,223) | (38,656) |
Net cash used in financing activities | (53,013) | (24,184) |
Net increase in cash and cash equivalents | 1,492 | 22,379 |
Cash and cash equivalents—beginning of period | 112,944 | 59,334 |
Cash and cash equivalents—end of period | 114,436 | 81,713 |
Supplemental disclosures of cash flow information: | ||
Interest paid, net of amounts capitalized | 948 | 201 |
Income taxes paid | 37,271 | 35,849 |
Capital expenditures included in current liabilities | $ 5,470 | $ 3,189 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 26, 2017 | |
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 have a controlling interest (collectively the "Company," "we," "our" and/or "us") as of September 26, 2017 and December 27, 2016 and for the 13 and 39 weeks ended September 26, 2017 and September 27, 2016. As of September 26, 2017, we owned and operated 455 restaurants and franchised an additional 85 restaurants in 49 states and six foreign countries. Of the 455 company-owned restaurants that were operating at September 26, 2017, 437 were wholly-owned and 18 were majority-owned. As of September 27, 2016, we owned and operated 422 restaurants and franchised an additional 85 restaurants in 49 states and five foreign countries. Of the 422 company-owned restaurants that were operating at September 27, 2016, 406 were wholly-owned and 16 were majority-owned. As of September 26, 2017 and September 27, 2016, we owned 5.0% to 10.0% equity interest in 24 franchise restaurants. Additionally, as of September 26, 2017 and September 27, 2016, 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 and 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 amounts of property and equipment and goodwill, obligations related to insurance reserves, leases and leasehold improvements, legal reserves, gift card discounts and breakage 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 39 weeks ended September 26, 2017 are not necessarily indicative of the results that may be expected for the year ending December 26, 2017. 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 27, 2016. Our significant interim accounting policies include the recognition of income taxes using an estimated annual effective tax rate. |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 26, 2017 | |
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. 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 39 Weeks Ended September 26, 2017 September 27, 2016 September 26, 2017 September 27, 2016 Labor expense $ 1,822 $ 1,570 $ 5,255 $ 4,475 General and administrative expense 4,639 5,074 13,571 13,872 Total share-based compensation expense $ 6,461 $ 6,644 $ 18,826 $ 18,347 Effective December 28, 2016, we adopted Accounting Standards Update No. 2016-09, Compensation – Stock Compensation ("ASU 2016-09") which amends and simplifies the accounting for stock compensation. As a result of the adoption of ASU 2016-09, we made a change in our accounting for forfeitures to record as they occur and, as a result, we recorded a $0.1 million cumulative-effect reduction to retained earnings under the modified retrospective approach. We elected prospective transition for the requirement to classify excess tax benefits as an operating activity in the consolidated statement of cash flows. No prior periods have been adjusted. Additionally, as a result of the new guidance requirements, on a prospective basis, all excess tax benefits and tax deficiencies are recognized within the income tax provision in the consolidated statements of income and comprehensive income in the period in which the restricted shares vest or options are exercised. See note 4 for further discussion. 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. Prior to 2008, we issued stock options as share-based compensation to our employees. Beginning in 2015, we began granting PSUs to two of our executives. An 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 defined performance obligations along with the satisfaction of the vesting requirement. Share-based compensation activity by type of grant as of September 26, 2017 and changes during the 39 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 27, 2016 919,463 $ 37.06 Granted 349,049 46.70 Forfeited (35,041) 37.40 Vested (404,505) 38.14 Outstanding at September 26, 2017 828,966 $ 40.57 1.2 $ 39,991 As of September 26, 2017, with respect to unvested RSUs, there was $17.4 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1.2 years. The vesting terms of the RSUs range from 1.0 to 5.0 years. The total intrinsic value of RSUs vested during the 39 weeks ended September 26, 2017 and September 27, 2016 was $18.8 million and $17.4 million, respectively. The excess tax benefit, which was recognized within the income tax provision, associated with vested RSUs was $1.2 million for the 39 weeks ended September 26, 2017. The excess tax benefit associated with vested RSUs for the 39 weeks ended September 27, 2016 was $1.2 million which was recorded in additional paid-in-capital in the unaudited condensed consolidated balance sheets. Summary Details for PSUs In 2015 and 2016, we granted PSUs to two of our executives subject to an approximate one-year vesting term 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 November 19, 2015, we granted PSUs with a grant date fair value of approximately $3.9 million based on a grant date price per share of $34.11. On January 8, 2017, 188,237 shares vested related to this PSU grant and were distributed during the 13 weeks ended March 28, 2017. On November 9, 2016, we granted PSUs with a grant date fair value of approximately $4.6 million based on a grant date price per share of $39.88. As of September 26, 2017, with respect to unvested PSUs, there was $1.1 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of three months. Any distribution of vested PSUs as common stock related to the November 9, 2016 grants will occur in the first quarter of 2018. For the 39 weeks ended September 26, 2017, the excess tax benefit, recognized within the income tax provision, associated with vested PSUs was $0.8 million. Summary Details for Stock Options Weighted- Weighted-Average Average Exercise Remaining Contractual Aggregate Shares Price Term (years) Intrinsic Value Outstanding at December 27, 2016 118,073 $ 13.57 Granted — — Cancelled/Expired (2,836) 15.47 Exercised (109,085) 13.61 Outstanding at September 26, 2017 6,152 $ 11.93 0.1 $ 223 Exercisable at September 26, 2017 6,152 $ 11.93 0.1 $ 223 No stock options vested during the 39 weeks ended September 26, 2017 or September 27, 2016. For the 39 weeks ended September 26, 2017 and September 27, 2016, the total intrinsic value of options exercised was $3.7 million and $5.3 million, respectively. For the 39 weeks ended September 26, 2017 and September 27, 2016, cash received before tax withholdings from options exercised was $1.5 million and $2.2 million, respectively. The excess tax benefit, recognized within the income tax provision, associated with options exercised was $1.0 million for the 39 weeks ended September 26, 2017. The excess tax benefit for the 39 weeks ended September 27, 2016 was $1.5 million which was recorded in additional paid-in-capital in the unaudited condensed consolidated balance sheets. |
Long-term Debt and Obligations
Long-term Debt and Obligations Under Capital Leases | 9 Months Ended |
Sep. 26, 2017 | |
Long-term Debt and Obligation Under Capital Lease | |
Long-term Debt and Obligations Under Capital Leases | (3) Long-term Debt and Obligation Under Capital Lease Long-term debt consisted of the following: September 26, December 27, 2017 2016 Installment loan $ — $ 550 Obligation under capital lease 1,993 1,998 Revolver 50,000 50,000 51,993 52,548 Less current maturities 9 167 $ 51,984 $ 52,381 The interest rate for our installment loan outstanding at December 27, 2016 was 10.46%. The installment loan was repaid during the 13 weeks ended September 26, 2017. During the 52 weeks ended December 27, 2016, we amended an existing lease at one restaurant location to acquire additional square footage. As a result of this amendment, the lease qualified as a capital lease. On August 7, 2017, we entered into the Amended and Restated Credit Agreement (the "Amended Credit Agreement") with respect to our revolving credit facility with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A., PNC Bank, N.A., and Wells Fargo Bank, N.A. The revolving credit facility remains an unsecured, revolving credit agreement under which we may borrow up to $200.0 million with the option to increase the revolving credit facility by an additional $200.0 million subject to certain limitations. The Amended Credit Agreement extends the maturity date of our revolving credit facility until August 5, 2022. The terms of the Amended Credit Agreement require us to pay interest on outstanding borrowings at the London Interbank Offered Rate ("LIBOR") plus a margin of 0.875% to 1.875% and to pay a commitment fee of 0.125% to 0.30% per year on any unused portion of the revolving credit facility, in each case depending on our leverage ratio, or the Alternate Base Rate, which is the highest of the issuing banks’ 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%. The weighted-average interest rate for the revolving credit facility as of September 26, 2017 and December 27, 2016 was 2.11% and 1.57%, respectively. As of September 26, 2017, we had $50.0 million outstanding under the revolving credit facility and $142.9 million of availability, net of $7.1 million of outstanding letters of credit. The lenders’ obligation to extend credit pursuant to the Amended Credit Agreement 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 Credit Agreement permits us to incur additional secured or unsecured indebtedness outside the revolving credit facility, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net worth. We were in compliance with all financial covenants as of September 26, 2017. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 26, 2017 | |
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 39 weeks ended September 26, 2017 and September 27, 2016 is as follows: 13 Weeks Ended 39 Weeks Ended September 26, 2017 September 27, 2016 September 26, 2017 September 27, 2016 Tax at statutory federal rate 35.0 % 35.0 % 35.0 % 35.0 % State and local tax, net of federal benefit 3.4 3.5 3.4 3.5 FICA tip tax credit (7.1) (7.1) (7.1) (6.9) Work opportunity tax credit (0.9) (0.9) (0.8) (0.8) Stock compensation (0.9) — (2.0) — Net income attributable to noncontrolling interests (1.1) (1.1) (1.1) (0.9) Other 0.4 0.4 0.3 0.1 Total 28.8 % 29.8 % 27.7 % 30.0 % As a result of the adoption of ASU 2016-09 , excess tax benefits and tax deficiencies from share-based compensation are recognized within the income tax provision in the period in which the restricted shares vest or options are exercised. During the 13 weeks ended September 26, 2017, we recognized $0.4 million as an income tax benefit, which resulted in a 0.9% impact on the tax rate. During the 39 weeks ended September 26, 2017, we recognized $3.0 million as an income tax benefit, which resulted in a 2.0% impact on the tax rate. Prior to the adoption of ASU 2016-09, excess tax benefits and deficiencies were recognized in additional paid-in capital in the unaudited condensed consolidated balance sheets. During the first quarter of 2017, we adopted ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which required deferred tax assets and liabilities to be classified as noncurrent on our condensed consolidated balance sheets. We adopted ASU 2015-17 on a prospective basis. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 26, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | (5) Commitments and Contingencies The estimated cost of completing capital project commitments at September 26, 2017 and December 27, 2016 was approximately $150.6 million and $157.5 million, respectively. As of September 26, 2017 and December 27, 2016, we were contingently liable for $15.8 million and $16.4 million, respectively, for seven lease guarantees, listed in the table below. 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 September 26, 2017 and December 27, 2016 as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant. Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2023 Longmont, Colorado (1) October 2003 May 2019 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1)(2) February 2006 July 2021 Logan, Utah (1) January 2009 August 2019 Irving, Texas (3) December 2013 December 2019 Louisville, Kentucky (3)(4) December 2013 November 2023 (1) Real estate lease agreements for restaurant locations which we entered into before granting franchise rights to those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable under the terms of the lease if the franchisee defaults . (2) As discussed in note 7, these restaurants are owned, in whole or part, by certain officers, directors and 5% shareholders of the Company. (3) Leases associated with non-Texas Roadhouse restaurants which were sold. The leases were assigned to the acquirer, but we remain contingently liable under the terms of the lease if the acquirer defaults. (4) We may be released from liability after the initial contractual lease term expiration contingent upon certain conditions being met by the acquirer. During the 13 and 39 weeks ended September 26, 2017, 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 and/or 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. We and the U.S. Equal Employment Opportunity Commission entered into a consent decree dated March 31, 2017 (the "Consent Decree") to settle the 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 "Lawsuit"). The Consent Decree resolves the issues litigated in the Lawsuit. Under the Consent Decree, among other terms, we have established a fund of $12.0 million, from which awards of monetary relief, allocated as wages for tax purposes, may be made to eligible claimants in accordance with procedures set forth in the Consent Decree. We recorded a pre-tax charge of $14.9 million ($9.2 million after-tax) related to the Lawsuit and Consent Decree. The pre-tax charge includes $12.6 million of costs associated with the legal settlement and $2.3 million of legal fees associated with the defense of the case during the 13 weeks ended March 28, 2017. The pre-tax charge was recorded in general and administrative expense in our unaudited condensed consolidated statements of income and comprehensive income. Occasionally, we are a defendant in litigation arising in the ordinary course of our business, including "slip and fall" accidents, employment related claims, claims related to our service of alcohol, and claims from guests or employees alleging illness, injury or food quality, health or operational concerns. None of these types of litigation, most of which are covered by insurance, has had a material effect on us and, as of the date of this report, we are not party to any litigation that we believe could have a material adverse effect on our business. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 26, 2017 | |
Acquisitions | |
Acquisitions | (6) Acquisitions On December 28, 2016, we acquired four franchise restaurants in Florida and Georgia. Pursuant to the terms of the acquisition agreements, we paid a total purchase price of $16.5 million, net of cash acquired. Two of the acquired restaurants are wholly-owned and the remaining two restaurants are majority-owned. These acquisitions are consistent with our long-term strategy to increase net income and earnings per share. These transactions were accounted for using the purchase method as defined in ASC 805, Business Combinations ("ASC 805"). Based on a purchase price of $16.5 million, $4.5 million of goodwill was generated by the acquisition, which is not amortizable for book purposes, but is deductible for tax purposes. The purchase price has been allocated as follows: Current assets $ 170 Property and equipment 12,281 Goodwill 4,469 Current liabilities (392) $ 16,528 Pro forma results of operations and revenue and earnings for the 39 weeks ended September 26, 2017 have not been presented because the effect of the acquisitions was not material to our consolidated financial position, results of operations or cash flows. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 26, 2017 | |
Related Party Transactions | |
Related Party Transactions | (7) Related Party Transactions As of September 26, 2017 and September 27, 2016, we had 10 franchise restaurants owned in whole or part, by certain officers, directors and 5% stockholders of the Company. For both 13 week periods ended September 26, 2017 and September 27, 2016, these entities paid us fees of approximately $0.5 million. For the 39 week periods ended September 26, 2017 and September 27, 2016, these entities paid us fees of approximately $1.6 million and $1.5 million, respectively. As disclosed in note 5, we are contingently liable on leases which are related to two of these restaurants. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 26, 2017 | |
Earnings Per Share | |
Earnings Per Share | (8) 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. For both 13 week periods ended September 26, 2017 and September 27, 2016, there were no shares of 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. For the 39 week periods ended September 26, 2017 and September 27, 2016, there were 7,960 and six shares of nonvested stock, respectively, that had an anti-dilutive effect. For all periods presented, there were no outstanding options that had an anti-dilutive effect. 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 39 Weeks Ended September 26, 2017 September 27, 2016 September 26, 2017 September 27, 2016 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 31,014 $ 25,675 $ 102,908 $ 94,873 Basic EPS: Weighted-average common shares outstanding 71,067 70,477 70,939 70,338 Basic EPS $ 0.44 $ 0.36 $ 1.45 $ 1.35 Diluted EPS: Weighted-average common shares outstanding 71,067 70,477 70,939 70,338 Dilutive effect of stock options and nonvested stock 465 504 510 560 Shares-diluted 71,532 70,981 71,449 70,898 Diluted EPS $ 0.43 $ 0.36 $ 1.44 $ 1.34 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 26, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | (9) 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 Level 2 Level 3 There were no transfers among levels within the fair value hierarchy during the 13 and 39 weeks ended September 26, 2017. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level September 26, 2017 December 27, 2016 Deferred compensation plan—assets 1 $ 26,966 $ 21,951 Deferred compensation plan—liabilities 1 (26,980) (22,128) 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 amounts 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 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 September 26, 2017 and December 27, 2016, 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 September 26, 2017 and December 27, 2016 approximated its carrying value since it is a variable rate credit facility (Level 2). |
Stock Repurchase Program
Stock Repurchase Program | 9 Months Ended |
Sep. 26, 2017 | |
Stock Repurchase Program | |
Stock Repurchase Program | (10) 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. We did not repurchase any shares of common stock during the 13 and 39 week periods ended September 26, 2017. As of September 26, 2017, we had approximately $69.9 million remaining under our authorized stock repurchase program. For the 13 week period ended September 27, 2016, we did not repurchase any shares of common stock. For the 39 week period ended September 27, 2016, we paid approximately $4.1 million to repurchase 114,700 shares of our common stock. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 26, 2017 | |
Share-based Compensation | |
Summary of allocation of share-based compensation expense | 13 Weeks Ended 39 Weeks Ended September 26, 2017 September 27, 2016 September 26, 2017 September 27, 2016 Labor expense $ 1,822 $ 1,570 $ 5,255 $ 4,475 General and administrative expense 4,639 5,074 13,571 13,872 Total share-based compensation expense $ 6,461 $ 6,644 $ 18,826 $ 18,347 |
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 27, 2016 919,463 $ 37.06 Granted 349,049 46.70 Forfeited (35,041) 37.40 Vested (404,505) 38.14 Outstanding at September 26, 2017 828,966 $ 40.57 1.2 $ 39,991 |
Summary of stock option activity | Weighted- Weighted-Average Average Exercise Remaining Contractual Aggregate Shares Price Term (years) Intrinsic Value Outstanding at December 27, 2016 118,073 $ 13.57 Granted — — Cancelled/Expired (2,836) 15.47 Exercised (109,085) 13.61 Outstanding at September 26, 2017 6,152 $ 11.93 0.1 $ 223 Exercisable at September 26, 2017 6,152 $ 11.93 0.1 $ 223 |
Long term Debt and Obligation U
Long term Debt and Obligation Under Capital Lease (Tables) | 9 Months Ended |
Sep. 26, 2017 | |
Long-term Debt and Obligation Under Capital Lease | |
Schedule of long-term debt | September 26, December 27, 2017 2016 Installment loan $ — $ 550 Obligation under capital lease 1,993 1,998 Revolver 50,000 50,000 51,993 52,548 Less current maturities 9 167 $ 51,984 $ 52,381 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 26, 2017 | |
Income Taxes | |
Schedule of reconciliation of the statutory federal income tax rate to the entity's effective tax rate | 13 Weeks Ended 39 Weeks Ended September 26, 2017 September 27, 2016 September 26, 2017 September 27, 2016 Tax at statutory federal rate 35.0 % 35.0 % 35.0 % 35.0 % State and local tax, net of federal benefit 3.4 3.5 3.4 3.5 FICA tip tax credit (7.1) (7.1) (7.1) (6.9) Work opportunity tax credit (0.9) (0.9) (0.8) (0.8) Stock compensation (0.9) — (2.0) — Net income attributable to noncontrolling interests (1.1) (1.1) (1.1) (0.9) Other 0.4 0.4 0.3 0.1 Total 28.8 % 29.8 % 27.7 % 30.0 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 26, 2017 | |
Commitments and Contingencies | |
Schedule of real estate lease agreements for franchises | Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2023 Longmont, Colorado (1) October 2003 May 2019 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1)(2) February 2006 July 2021 Logan, Utah (1) January 2009 August 2019 Irving, Texas (3) December 2013 December 2019 Louisville, Kentucky (3)(4) December 2013 November 2023 (1) Real estate lease agreements for restaurant locations which we entered into before granting franchise rights to those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable under the terms of the lease if the franchisee defaults . (2) As discussed in note 7, these restaurants are owned, in whole or part, by certain officers, directors and 5% shareholders of the Company. (3) Leases associated with non-Texas Roadhouse restaurants which were sold. The leases were assigned to the acquirer, but we remain contingently liable under the terms of the lease if the acquirer defaults. (4) We may be released from liability after the initial contractual lease term expiration contingent upon certain conditions being met by the acquirer. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 26, 2017 | |
Acquisitions | |
Schedule of purchase price allocation | Current assets $ 170 Property and equipment 12,281 Goodwill 4,469 Current liabilities (392) $ 16,528 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 26, 2017 | |
Earnings Per Share | |
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 39 Weeks Ended September 26, 2017 September 27, 2016 September 26, 2017 September 27, 2016 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 31,014 $ 25,675 $ 102,908 $ 94,873 Basic EPS: Weighted-average common shares outstanding 71,067 70,477 70,939 70,338 Basic EPS $ 0.44 $ 0.36 $ 1.45 $ 1.35 Diluted EPS: Weighted-average common shares outstanding 71,067 70,477 70,939 70,338 Dilutive effect of stock options and nonvested stock 465 504 510 560 Shares-diluted 71,532 70,981 71,449 70,898 Diluted EPS $ 0.43 $ 0.36 $ 1.44 $ 1.34 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 26, 2017 | |
Fair Value Measurements | |
Schedule of fair value of assets and liabilities measured on a recurring basis | Fair Value Measurements Level September 26, 2017 December 27, 2016 Deferred compensation plan—assets 1 $ 26,966 $ 21,951 Deferred compensation plan—liabilities 1 (26,980) (22,128) |
Basis of Presentation (Details)
Basis of Presentation (Details) | Sep. 26, 2017restaurantitem | Sep. 27, 2016restaurantitem |
Description of Business | ||
Number of states in which restaurants operate | item | 49 | 49 |
Number of countries in which restaurants operate | item | 6 | 5 |
Company-owned | ||
Description of Business | ||
Number of restaurants | 455 | 422 |
Company-owned | Wholly-owned | ||
Description of Business | ||
Number of restaurants | 437 | 406 |
Company-owned | Majority-owned | ||
Description of Business | ||
Number of restaurants | 18 | 16 |
Franchise | ||
Description of Business | ||
Number of restaurants | 85 | 85 |
Franchise | Unconsolidated | ||
Description of Business | ||
Number of restaurants | 24 | 24 |
Franchise | Unconsolidated | Minimum | ||
Description of Business | ||
Ownership percentage by entity | 5.00% | 5.00% |
Franchise | Unconsolidated | Maximum | ||
Description of Business | ||
Ownership percentage by entity | 10.00% | 10.00% |
Non-Texas Roadhouse restaurants | Unconsolidated | ||
Description of Business | ||
Number of restaurants | 4 | 4 |
Ownership percentage by entity | 40.00% | 40.00% |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2017 | Sep. 27, 2016 | Sep. 26, 2017 | Sep. 27, 2016 | |
Share-based compensation expenses | ||||
Share-based compensation expense | $ 6,461 | $ 6,644 | $ 18,826 | $ 18,347 |
Labor expense | ||||
Share-based compensation expenses | ||||
Share-based compensation expense | 1,822 | 1,570 | 5,255 | 4,475 |
General and administrative expense | ||||
Share-based compensation expenses | ||||
Share-based compensation expense | $ 4,639 | $ 5,074 | $ 13,571 | $ 13,872 |
Share-based Compensation, ASU 2
Share-based Compensation, ASU 2016-09 (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 26, 2017 | Dec. 27, 2016 | |
ASU 2016-09 Compensation-Stock Compensation | ||
ASU 2016-09 | ||
Cumulative effect on retained earnings | $ (0.1) | $ 0 |
Share-based Compensation, Restr
Share-based Compensation, Restricted Stock and PSU (Details) $ / shares in Units, $ in Thousands | Jan. 08, 2017shares | Nov. 09, 2016USD ($)$ / shares | Nov. 19, 2015USD ($)$ / shares | Sep. 26, 2017USD ($)$ / sharesshares | Sep. 27, 2016USD ($) | Dec. 27, 2016item$ / sharesshares | Dec. 29, 2015item | Sep. 26, 2017USD ($)item$ / sharesshares |
PSUs | ||||||||
Share-based compensation | ||||||||
Number of executives granted performance stock units | item | 2 | 2 | 2 | |||||
Number of common shares that a holder would receive upon meeting a performance obligation and vesting requirement (in shares) | shares | 1 | 1 | ||||||
Restricted Stock Units, Shares | ||||||||
Vested (in shares) | shares | (188,237) | |||||||
Restricted Stock Units, Weighted-Average Grant Date Fair Value | ||||||||
Granted (in dollars per share) | $ / shares | $ 39.88 | $ 34.11 | ||||||
Unrecognized compensation cost | ||||||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ | $ 1,100 | $ 1,100 | ||||||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 3 months | |||||||
Share-based Compensation, other disclosures | ||||||||
Vesting period | 1 year | 1 year | ||||||
Excess tax benefit recognized within the income tax provision | $ | $ 800 | |||||||
Grant date fair value | $ | $ 4,600 | $ 3,900 | ||||||
RSUs | ||||||||
Share-based compensation | ||||||||
Number of common shares that a holder would receive upon satisfaction of the vesting requirement (in shares) | shares | 1 | 1 | ||||||
Restricted Stock Units, Shares | ||||||||
Outstanding at the beginning of the period (in shares) | shares | 919,463 | |||||||
Granted (in shares) | shares | 349,049 | |||||||
Forfeited (in shares) | shares | (35,041) | |||||||
Vested (in shares) | shares | (404,505) | |||||||
Outstanding at the end of period (in shares) | shares | 828,966 | 919,463 | 828,966 | |||||
Restricted Stock Units, Weighted-Average Grant Date Fair Value | ||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 37.06 | |||||||
Granted (in dollars per share) | $ / shares | 46.70 | |||||||
Forfeited (in dollars per share) | $ / shares | 37.40 | |||||||
Vested (in dollars per share) | $ / shares | 38.14 | |||||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 40.57 | $ 37.06 | $ 40.57 | |||||
Weighted-Average Remaining Contractual Term (years) | ||||||||
Weighted-Average Remaining Contractual Term | 1 year 2 months 12 days | |||||||
Aggregate Intrinsic Value | ||||||||
Outstanding at the end of the period (in dollars) | $ | $ 39,991 | $ 39,991 | ||||||
Intrinsic value of awards vested (in dollars) | $ | 18,800 | $ 17,400 | ||||||
Unrecognized compensation cost | ||||||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ | $ 17,400 | $ 17,400 | ||||||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 1 year 2 months 12 days | |||||||
Share-based Compensation, other disclosures | ||||||||
Excess tax benefit recognized within the income tax provision | $ | $ 1,200 | |||||||
Excess tax benefit recorded in additional paid-in capital | $ | $ 1,200 | |||||||
RSUs | Minimum | ||||||||
Share-based Compensation, other disclosures | ||||||||
Vesting period | 1 year | |||||||
RSUs | Maximum | ||||||||
Share-based Compensation, other disclosures | ||||||||
Vesting period | 5 years |
Share-based Compensation, Optio
Share-based Compensation, Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 26, 2017 | Sep. 27, 2016 | |
Aggregate Intrinsic Value | ||
Proceeds from exercise of stock options | $ 1,485 | $ 2,172 |
Stock Options | ||
Shares | ||
Outstanding at the beginning of the period (in shares) | 118,073 | |
Cancelled/Expired (in shares) | (2,836) | |
Exercised (in shares) | (109,085) | |
Outstanding at the end of the period (in shares) | 6,152 | |
Exercisable at the end of period (in shares) | 6,152 | |
Stock options vested (in shares) | 0 | 0 |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 13.57 | |
Cancelled/Expired (in dollars per share) | 15.47 | |
Exercised (in dollars per share) | 13.61 | |
Outstanding at the end of the period (in dollars per share) | 11.93 | |
Exercisable at the end of the period (in dollars per share) | $ 11.93 | |
Weighted-Average Remaining Contractual Term | ||
Outstanding at the end of the period | 1 month 6 days | |
Exercisable at the end of the period | 1 month 6 days | |
Aggregate Intrinsic Value | ||
Outstanding at the end of the period (in dollars) | $ 223 | |
Exercisable at the end of the period (in dollars) | 223 | |
Intrinsic value of options exercised (in dollars) | 3,700 | $ 5,300 |
Proceeds from exercise of stock options | 1,500 | 2,200 |
Excess tax benefit recognized within the income tax provision | $ 1,000 | |
Excess tax benefit recorded in additional paid-in capital | $ 1,500 |
Long-term Debt and Obligation31
Long-term Debt and Obligations Under Capital Leases (Details) $ in Thousands | Aug. 07, 2017USD ($) | Dec. 27, 2016USD ($)restaurant | Sep. 26, 2017USD ($) |
Long-term Debt | |||
Long-term debt and capital lease obligations | $ 52,548 | $ 51,993 | |
Less current maturities | 167 | 9 | |
Long-term debt and capital lease obligations, excluding current maturities | $ 52,381 | 51,984 | |
Number of restaurant locations lease amended qualifies as capital lease | restaurant | 1 | ||
Installment loan | |||
Long-term Debt | |||
Long-term debt and capital lease obligations | $ 550 | ||
Interest rate (as a percent) | 10.46% | ||
Obligations under capital leases | |||
Long-term Debt | |||
Long-term debt and capital lease obligations | $ 1,998 | 1,993 | |
Revolver | |||
Long-term Debt | |||
Long-term debt and capital lease obligations | $ 50,000 | $ 50,000 | |
Revolving credit facility, maximum borrowing capacity | $ 200,000 | ||
Revolving credit facility contingent increase in maximum borrowing capacity | 200,000 | ||
Weighted-average interest rate (as a percent) | 1.57% | 2.11% | |
Revolving credit facility, amount outstanding | $ 50,000 | ||
Revolving credit facility, remaining borrowing capacity | 142,900 | ||
Letters of credit outstanding | $ 7,100 | ||
Threshold for aggregate secured indebtedness | $ 125,000 | ||
Debt instrument condition for additional borrowing of secured debt, based on percentage of consolidated tangible net worth | 20.00% | ||
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% | ||
Interest period | 1 month |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2017 | Sep. 27, 2016 | Sep. 26, 2017 | Sep. 27, 2016 | |
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) | 3.40% | 3.50% | 3.40% | 3.50% |
FICA tip tax credit (as a percent) | (7.10%) | (7.10%) | (7.10%) | (6.90%) |
Work opportunity tax credit (as a percent) | (0.90%) | (0.90%) | (0.80%) | (0.80%) |
Stock compensation (as a percent) | (0.90%) | (2.00%) | ||
Net income attributable to noncontrolling interests (as a percent) | (1.10%) | (1.10%) | (1.10%) | (0.90%) |
Other (as a percent) | 0.40% | 0.40% | 0.30% | 0.10% |
Total (as a percent) | 28.80% | 29.80% | 27.70% | 30.00% |
Income Taxes, ASU 2016-09 (Deta
Income Taxes, ASU 2016-09 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2017 | Sep. 27, 2016 | Sep. 26, 2017 | Sep. 27, 2016 | |
ASU 2016-09 | ||||
Income tax (expense) benefit | $ (13,046) | $ (11,381) | $ (41,159) | $ (42,325) |
Impact on tax rate (as a percent) | 0.90% | 2.00% | ||
ASU 2016-09 Compensation-Stock Compensation | ||||
ASU 2016-09 | ||||
Income tax (expense) benefit | $ 400 | $ 3,000 | ||
Impact on tax rate (as a percent) | 0.90% | 2.00% |
Commitments and Contingencies34
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 26, 2017USD ($)item | Mar. 28, 2017USD ($) | Sep. 26, 2017USD ($)item | Dec. 27, 2016USD ($)item | |
Commitments and Contingencies | ||||
Estimated cost to complete capital project commitments (in dollars) | $ 150.6 | $ 150.6 | $ 157.5 | |
Number of suppliers providing most of the company's beef | item | 3 | 3 | ||
Lease Agreements | ||||
Commitments and Contingencies | ||||
Number of leases guarantees entity contingently liable | item | 7 | 7 | ||
Lease Agreements | Maximum | ||||
Commitments and Contingencies | ||||
Contingently liable amount | $ 15.8 | $ 15.8 | $ 16.4 | |
U.S. Equal Employment Opportunity Commission | ||||
Commitments and Contingencies | ||||
Contingently liable amount | $ 12 | 12 | ||
Estimated loss contingency, net of tax | 9.2 | |||
U.S. Equal Employment Opportunity Commission | General and administrative expense | ||||
Commitments and Contingencies | ||||
Estimated loss contingency recorded during period | $ 14.9 | |||
Legal settlement amount | $ 12.6 | |||
Pre-tax charge associated with the legal fees | $ 2.3 | |||
Everett, Massachusetts | Lease Agreements | ||||
Commitments and Contingencies | ||||
Ownership percentage | 5.00% | 5.00% | ||
Fargo, North Dakota | Lease Agreements | ||||
Commitments and Contingencies | ||||
Ownership percentage | 5.00% | 5.00% |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Dec. 28, 2016USD ($)restaurant | Sep. 26, 2017USD ($) | Dec. 27, 2016USD ($) |
Purchase price allocation | |||
Goodwill | $ 121,040 | $ 116,571 | |
Four franchise restaurants in Florida and Georgia | |||
Acquisitions | |||
Number of franchise restaurants acquired | restaurant | 4 | ||
Purchase price paid | $ 16,500 | ||
Purchase price allocation | |||
Current assets | 170 | ||
Property and equipment | 12,281 | ||
Goodwill | 4,469 | ||
Current liabilities | (392) | ||
Purchase price | $ 16,528 | ||
Four franchise restaurants in Florida and Georgia | Wholly-owned | |||
Acquisitions | |||
Number of franchise restaurants acquired | restaurant | 2 | ||
Four franchise restaurants in Florida and Georgia | Majority-owned | |||
Acquisitions | |||
Number of franchise restaurants acquired | restaurant | 2 |
Related Party Transactions (Det
Related Party Transactions (Details) - Franchise $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2017USD ($)restaurant | Sep. 27, 2016USD ($)restaurant | Sep. 26, 2017USD ($)restaurant | Sep. 27, 2016USD ($)restaurant | |
Related Party Transactions | ||||
Number of franchise restaurants | 85 | 85 | 85 | 85 |
Officers, directors and shareholders | ||||
Related Party Transactions | ||||
Number of franchise restaurants | 10 | 10 | 10 | 10 |
Ownership percentage by entity | 5.00% | 5.00% | 5.00% | 5.00% |
Fees received from franchise and license restaurants | $ | $ 0.5 | $ 0.5 | $ 1.6 | $ 1.5 |
Number of restaurants for which the entity is contingently liable on the lease | 2 | 2 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2017 | Sep. 27, 2016 | Sep. 26, 2017 | Sep. 27, 2016 | |
Earnings per share | ||||
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 31,014 | $ 25,675 | $ 102,908 | $ 94,873 |
Basic EPS: | ||||
Weighted-average common shares outstanding (in shares) | 71,067,000 | 70,477,000 | 70,939,000 | 70,338,000 |
Basic EPS (in dollars per share) | $ 0.44 | $ 0.36 | $ 1.45 | $ 1.35 |
Diluted EPS: | ||||
Weighted-average common shares outstanding (in shares) | 71,067,000 | 70,477,000 | 70,939,000 | 70,338,000 |
Dilutive effect of stock options and nonvested stock (in shares) | 465,000 | 504,000 | 510,000 | 560,000 |
Shares - diluted (in shares) | 71,532,000 | 70,981,000 | 71,449,000 | 70,898,000 |
Diluted EPS (in dollars per share) | $ 0.43 | $ 0.36 | $ 1.44 | $ 1.34 |
Nonvested stock | ||||
Antidilutive securities | ||||
Anti-dilutive securities (in shares) | 7,960 | 6 | ||
Stock Options | ||||
Antidilutive securities | ||||
Anti-dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Thousands | 9 Months Ended | |
Sep. 26, 2017USD ($)item | Dec. 27, 2016USD ($) | |
Fair value of financial instruments | ||
Transfer of asset levels within the fair value hierarchy | $ 0 | |
Minimum number of investment funds in rabbi trust for deferred compensation plan | item | 1 | |
Fair value measured on a recurring basis | Level 1 | ||
Fair value of financial instruments | ||
Deferred compensation plan - assets | $ 26,966 | $ 21,951 |
Deferred compensation plan - liabilities | $ (26,980) | $ (22,128) |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2017 | Sep. 27, 2016 | Sep. 26, 2017 | Sep. 27, 2016 | May 22, 2014 | |
Stock Repurchase Program | |||||
Repurchase of common stock authorized by board of directors | $ 100,000 | ||||
Amount remaining under authorized stock repurchase program | $ 69,900 | $ 69,900 | |||
Payments to repurchase common stock | $ 0 | $ 0 | $ 0 | $ 4,110 | |
Number of shares repurchased | 114,700 |