Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 29, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Texas Roadhouse, Inc. | |
Entity Central Index Key | 0001289460 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-29 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Trading Symbol | TXRH | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 69,310,804 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Transition Report | false | |
Entity File Number | 000-50972 | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Entity Tax Identification Number | 20-1083890 | |
Entity Address, Address Line One | 6040 Dutchmans Lane, Suite 200 | |
Entity Address, City or Town | Louisville | |
Entity Address, State or Province | KY | |
Entity Address, Postal Zip Code | 40205 | |
City Area Code | 502 | |
Local Phone Number | 426-9984 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 230,606 | $ 107,879 |
Receivables, net of allowance for doubtful accounts of $72 at March 31, 2020 and $12 at December 31, 2019 | 25,441 | 99,305 |
Inventories, net | 20,321 | 20,267 |
Prepaid income taxes | 6,524 | 2,015 |
Prepaid expenses | 19,682 | 18,433 |
Total current assets | 302,574 | 247,899 |
Property and equipment, net of accumulated depreciation of $698,841 at March 31, 2020 and $678,988 at December 31, 2019 | 1,068,701 | 1,056,563 |
Operating lease right-of-use asset, net | 512,574 | 499,801 |
Goodwill | 124,748 | 124,748 |
Intangible assets, net of accumulated amortization of $13,911 at March 31, 2020 and $14,141 at December 31, 2019 | 1,101 | 1,234 |
Other assets | 45,006 | 53,320 |
Total assets | 2,054,704 | 1,983,565 |
Current liabilities: | ||
Current portion of operating lease liabilities | 17,925 | 17,263 |
Accounts payable | 42,984 | 61,653 |
Deferred revenue-gift cards | 152,261 | 209,258 |
Accrued wages | 25,612 | 39,699 |
Income taxes payable | 2,095 | |
Accrued taxes and licenses | 19,438 | 30,433 |
Other accrued liabilities | 50,546 | 58,914 |
Total current liabilities | 310,861 | 417,220 |
Operating lease liabilities, net of current portion | 553,181 | 538,710 |
Long-term debt | 190,000 | |
Restricted stock and other deposits | 8,683 | 8,249 |
Deferred tax liabilities, net | 23,115 | 22,695 |
Other liabilities | 58,121 | 65,522 |
Total liabilities | 1,143,961 | 1,052,396 |
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, 69,310,804 and 69,400,252 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively) | 69 | 69 |
Additional paid-in-capital | 129,796 | 140,501 |
Retained earnings | 766,689 | 775,649 |
Accumulated other comprehensive loss | (262) | (225) |
Total Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 896,292 | 915,994 |
Noncontrolling interests | 14,451 | 15,175 |
Total equity | 910,743 | 931,169 |
Total liabilities and equity | $ 2,054,704 | $ 1,983,565 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 72 | $ 12 |
Property and equipment, accumulated depreciation (in dollars) | 698,841 | 678,988 |
Intangible assets, accumulated amortization (in dollars) | $ 13,911 | $ 14,141 |
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 | 69,310,804 | 69,400,252 |
Common stock, shares outstanding | 69,310,804 | 69,400,252 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 26, 2019 | |
Revenue: | ||
Revenue | $ 652,524 | $ 690,608 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||
Cost of sales | 210,180 | 223,712 |
Labor | 241,079 | 223,880 |
Rent | 13,471 | 13,128 |
Other operating | 104,289 | 101,802 |
Pre-opening | 5,112 | 3,868 |
Depreciation and amortization | 29,054 | 27,773 |
Impairment and closure, net | 595 | 17 |
General and administrative | 32,954 | 35,983 |
Total costs and expenses | 636,734 | 630,163 |
Income from operations | 15,790 | 60,445 |
Interest expense (income), net | 69 | (754) |
Equity (loss) income from investments in unconsolidated affiliates | (508) | 113 |
Income before taxes | 15,213 | 61,312 |
Income tax (benefit) expense | (1,939) | 9,119 |
Net income including noncontrolling interests | 17,152 | 52,193 |
Less: Net income attributable to noncontrolling interests | 1,123 | 1,803 |
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | 16,029 | 50,390 |
Other comprehensive (loss) income, net of tax: | ||
Foreign currency translation adjustment, net of tax of $13 and ($33), respectively | (37) | 97 |
Total comprehensive income | $ 15,992 | $ 50,487 |
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | ||
Basic | $ 0.23 | $ 0.70 |
Diluted | $ 0.23 | $ 0.70 |
Weighted average shares outstanding: | ||
Basic | 69,422 | 71,753 |
Diluted | 69,852 | 72,187 |
Cash dividends declared per share | $ 0.36 | $ 0.30 |
Restaurant and other sales | ||
Revenue: | ||
Revenue | $ 647,626 | $ 685,117 |
Franchise royalties and fees | ||
Revenue: | ||
Revenue | $ 4,898 | $ 5,491 |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 26, 2019 | |
Consolidated Statements of Income and Comprehensive Income | ||
Foreign currency translation adjustment, (tax)/benefit | $ 13 | $ (33) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - 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. 25, 2018 | $ 945,569 | $ 72 | $ 257,388 | $ 688,337 | $ (228) | $ 15,139 | $ 960,708 |
Balance (in shares) at Dec. 25, 2018 | 71,617,510 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 50,390 | 50,390 | 1,803 | 52,193 | |||
Other comprehensive income (loss), net of tax | 97 | 97 | 97 | ||||
Distributions to noncontrolling interest holders | (1,615) | (1,615) | |||||
Acquisition of noncontrolling interest | (70) | (70) | (673) | (743) | |||
Dividends declared | (21,547) | (21,547) | (21,547) | ||||
Shares issued under share-based compensation plans including tax effects (in shares) | 330,628 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (7,400) | (7,400) | (7,400) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (120,302) | ||||||
Cumulative effect of change in accounting principle | ASU 2016-02 (Topic 842) | (2,678) | (2,678) | (2,678) | ||||
Share-based compensation | 9,132 | 9,132 | 9,132 | ||||
Balance at Mar. 26, 2019 | 973,493 | $ 72 | 259,050 | 714,502 | (131) | 14,654 | 988,147 |
Balance (in shares) at Mar. 26, 2019 | 71,827,836 | ||||||
Balance at Dec. 31, 2019 | 915,994 | $ 69 | 140,501 | 775,649 | (225) | 15,175 | $ 931,169 |
Balance (in shares) at Dec. 31, 2019 | 69,400,252 | 69,400,252 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 16,029 | 16,029 | 1,123 | $ 17,152 | |||
Other comprehensive income (loss), net of tax | (37) | (37) | (37) | ||||
Distributions to noncontrolling interest holders | (1,847) | (1,847) | |||||
Dividends declared | (24,989) | (24,989) | (24,989) | ||||
Shares issued under share-based compensation plans including tax effects (in shares) | 251,792 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (5,331) | (5,331) | (5,331) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (88,831) | ||||||
Repurchase of shares of common stock | (12,621) | (12,621) | $ (12,621) | ||||
Repurchase of shares of common stock (in shares) | (252,409) | (252,409) | |||||
Share-based compensation | 7,247 | 7,247 | $ 7,247 | ||||
Balance at Mar. 31, 2020 | $ 896,292 | $ 69 | $ 129,796 | $ 766,689 | $ (262) | $ 14,451 | $ 910,743 |
Balance (in shares) at Mar. 31, 2020 | 69,310,804 | 69,310,804 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 26, 2019 | |
Consolidated Statement of Stockholders' Equity | ||
Dividends declared (in dollars per share) | $ 0.36 | $ 0.30 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 26, 2019 | |
Cash flows from operating activities: | ||
Net income including noncontrolling interests | $ 17,152 | $ 52,193 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 29,054 | 27,773 |
Deferred income taxes | 433 | (1,094) |
Loss on disposition of assets | 1,446 | 1,383 |
Impairment and closure costs | 624 | 17 |
Equity loss (income) from investments in unconsolidated affiliates | 508 | (113) |
Distributions of income received from investments in unconsolidated affiliates | 184 | 171 |
Provision for doubtful accounts | 60 | (4) |
Share-based compensation expense | 7,247 | 9,132 |
Changes in operating working capital: | ||
Receivables | 74,504 | 57,433 |
Inventories | (54) | 1,306 |
Prepaid expenses | (1,249) | (2,301) |
Other assets | 7,573 | (4,739) |
Accounts payable | (22,214) | 2,830 |
Deferred revenue-gift cards | (56,997) | (63,629) |
Accrued wages | (14,087) | 3,131 |
Prepaid income taxes and income taxes payable | (2,414) | 16,200 |
Accrued taxes and licenses | (10,995) | 228 |
Other accrued liabilities | (3,023) | 3,819 |
Operating lease right-of-use assets and lease liabilities | 1,365 | 1,479 |
Other liabilities | (7,401) | 6,200 |
Net cash provided by operating activities | 21,716 | 111,415 |
Cash flows from investing activities: | ||
Capital expenditures-property and equipment | (46,672) | (42,044) |
Proceeds from sale leaseback transaction | 2,167 | |
Net cash used in investing activities | (44,505) | (42,044) |
Cash flows from financing activities: | ||
Proceeds from revolving credit facility | 190,000 | |
Distributions to noncontrolling interest holders | (1,847) | (1,615) |
Acquisition of noncontrolling interest | (743) | |
Proceeds from restricted stock and other deposits, net | 304 | 273 |
Indirect repurchase of shares for minimum tax withholdings | (5,331) | (7,400) |
Repurchase of shares of common stock | (12,621) | |
Dividends paid to shareholders | (24,989) | (17,904) |
Net cash provided by (used in) financing activities | 145,516 | (27,389) |
Net increase in cash and cash equivalents | 122,727 | 41,982 |
Cash and cash equivalents-beginning of period | 107,879 | 210,125 |
Cash and cash equivalents-end of period | 230,606 | 252,107 |
Supplemental disclosures of cash flow information: | ||
Interest paid, net of amounts capitalized | 186 | 164 |
Income taxes paid (refunded) | 51 | (5,987) |
Capital expenditures included in current liabilities | $ 13,545 | $ 10,489 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 and December 31, 2019 and for the 13 weeks ended March 31, 2020 and March 26, 2019. As of March 31, 2020, we owned and operated 519 restaurants and franchised an additional 98 restaurants in 49 states and ten foreign countries. Of the 519 company restaurants that were operating at March 31, 2020, 499 were wholly-owned and 20 were majority-owned. Of the 98 franchise restaurants, 70 were domestic restaurants and 28 were international restaurants. Included within these restaurant totals are one company restaurant and 22 international franchise restaurants that have been temporarily closed due to the global COVID-19 pandemic. These stores continue to be included in the owned and operated totals as we believe they will re-open once it is considered safe to do so. As of March 26, 2019, we owned and operated 495 restaurants and franchised an additional 93 restaurants in 49 states and ten foreign countries. Of the 495 company restaurants that were operating at March 26, 2019, 475 were wholly-owned and 20 were majority-owned. Of the 93 franchise restaurants, 69 were domestic restaurants and 24 were international restaurants. As of March 31, 2020 and March 26, 2019, we owned a 5.0% to 10.0% equity interest in 24 domestic franchise restaurants. Additionally, as of March 31, 2020 and March 26, 2019, we owned a 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 amount of property and equipment, goodwill, obligations related to insurance reserves, leases and leasehold improvements, legal reserves, gift card breakage and third-party fees 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 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 29, 2020. 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 31, 2019. Risks and Uncertainties The Company is subject to risks and uncertainties as a result of the novel coronavirus ( COVID-19 ) pandemic. On March 13, 2020, the COVID-19 pandemic (the pandemic ) was declared a National Public Health Emergency. As a result, several state and local mandates were implemented that encouraged the practice of social distancing, placed restrictions from individuals gathering in groups and, in many areas, placed complete restrictions on non-essential movement outside of the home . Shortly after the national emergency declaration, state and local officials began placing restrictions on restaurants, some of which allowed To-Go or curbside service only while others limited capacity in the dining room. By March 31, 2020, the last day of our Q1 2020 fiscal quarter, all of our domestic company and franchise restaurants were under state or local order which only allowed for To-Go or curbside service. As a result of the temporary dining room closures, we have experienced a significant decrease in traffic which has impacted our operating results. While we have seen significant sales growth in our To-Go program, we currently do not expect these sales will generate a similar profit margin to our normal operating model. We expect our operating results to continue to be severely impacted until such time that state and local restrictions are lifted, and our dining rooms can re-open at full capacity. We cannot predict how long the pandemic will last or when the state and local restrictions will be lifted. In addition, we cannot predict how quickly our guests will return to our restaurants once such restrictions have been lifted or the impact this will have on consumer spending habits. In addition, we continue to monitor federal and state plans to re-open the economy and have developed a framework that would allow us to implement a hybrid business model with limited capacity dining rooms together with enhanced To-Go through curbside service as permitted by local guidelines. We expect the re-opening process to be a gradual one with the safety of our employees and guests as our top priority. The extent of this re-opening process will determine the significance of the impact to our financial condition, financial results, and liquidity in future periods. In addition, significant items subject to estimates and assumptions including the carrying amount of property and equipment, goodwill, and lease related assets could be impacted. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | (2) Recent Accounting Pronouncements Financial Instruments (Accounting Standards Update 2016-13, "ASU 2016-13") In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Goodwill (Accounting Standards Update 2017-04, "ASU 2017-04") In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, We adopted ASU 2017-04 as of the beginning of our 2020 fiscal year. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. Fair Value Measurement (Accounting Standards Update 2018-13, "ASU 2018-13") In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, value measurements. We adopted ASU 2018-13 as of the beginning of our 2020 fiscal year. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. Income Taxes (Accounting Standards Update 2019-12, "ASU 2019-12") In December 2019. the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions related to the approach for intraperiod tax allocations, the calculation of income taxes in interim periods, and the recognition of deferred taxes for investments. This guidance also simplifies aspects of accounting for recognizing deferred taxes for taxable goodwill. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 (our 2021 fiscal year) and for interim periods within those years, with early adoption permitted. We are currently assessing the impact of this new standard on our consolidated financial statements. Reference Rate Reform (Accounting Standards Update 2020-04, "ASU 2020-04") In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These changes are intended to simplify the market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is effective upon issuance to modifications made as early as the beginning of the interim period through December 31, 2022. We are currently assessing the impact of this new standard on our consolidated financial statements |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Long-term Debt | |
Long-term Debt and Obligation Under Capital Lease | (3) Long-term Debt 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 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 Reserve Bank of New York rate plus 0.50% or the Adjusted Eurodollar Rate for a one month interest period on such day plus 1.0%. In March 2020, we borrowed $190.0 million under our revolving credit facility. The weighted-average interest rate for the revolving credit facility as of March 31, 2020 and December 31, 2019 was 1.64% and 2.64%, respectively. As of March 31, 2020, we had $190.0 million outstanding under the revolving credit facility and $1.8 million of availability, net of $8.2 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. We were in compliance with all financial covenants as of March 31, 2020. As further discussed in note 12, subsequent to the end of the quarter, we amended the revolving credit facility. The amendment increased the amount available under the revolving credit facility by $82.5 million and modified the financial covenants through the end of our Q1 2021 fiscal quarter. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue | |
Revenue | (4) Revenue The following table disaggregates our revenue by major source (in thousands): 13 weeks ended March 31, 2020 March 26, 2019 Restaurant and other sales $ 647,626 $ 685,117 Franchise royalties 4,287 4,856 Franchise fees 611 635 Total revenue $ 652,524 $ 690,608 We record deferred revenue for gift cards which includes cards that have been sold but not yet redeemed, a breakage adjustment for a percentage of gift cards that are not expected to be redeemed, and fees paid on gift cards sold through third-party retailers. When the gift cards are redeemed, we recognize restaurant sales and reduce deferred revenue. We amortize breakage and third-party fees consistent with the historic redemption pattern of the associated gift card and recognize as a component of other sales. As of March 31, 2020 and December 31, 2019, our deferred revenue balance related to gift cards was million, respectively. We recognized sales of million for the 13 weeks ended March 31, 2020 related to the amount in deferred revenue as of December 31, 2019. We recognized sales of |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes | |
Income Taxes | (5) Income Taxes A reconciliation of the statutory federal income tax rate to our effective tax rate for the 13 weeks ended March 31, 2020 and March 26, 2019 is as follows: 13 Weeks Ended March 31, 2020 March 26, 2019 Tax at statutory federal rate 21.0 % 21.0 % State and local tax, net of federal benefit 3.8 3.6 FICA tip tax credit (33.1) (9.4) Work opportunity tax credit (4.4) (1.4) Stock compensation (0.8) (0.5) Net income attributable to noncontrolling interests (1.2) (0.5) Officers compensation 0.3 1.4 Other 1.7 0.7 Total (12.7) % 14.9 % For the 13 week period ended March 31, 2020, we recognized income tax expense using a discrete tax calculation as we were unable to reliably estimate our full year effective income tax rate. This was primarily due to the inability to estimate the increased impact of the FICA tip and Work opportunity tax credits on our effective tax rate as result of the significant decrease in pre-tax income. This resulted in an effective tax rate of (12.7 %). For the 13 week period ended March 26, 2019, we recognized income tax expense using an estimated annual effective tax rate. This resulted in an effective tax rate of 14.9%. The effective rate decreased to (12.7 %) in Q1 2020 primarily due to the significant decrease in pre-tax income. As a result, the impact of our FICA tip and Work opportunity tax credits had a more significant impact to our effective tax rate. Additionally, these credits exceeded our federal tax liability in Q1 2020 but we expect to utilize these credits in the current year or by carrying back to our 2019 tax year. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | (6) Commitments and Contingencies The estimated cost of completing capital project commitments at March 31, 2020 and December 31, 2019 was $141.1 million and $119.0 million, respectively. As a result of the COVID-19 pandemic, we are only continuing construction on restaurants, including one relocation site, that are substantially complete and have delayed construction on the remaining locations in our pipeline. The estimated cost of completing these As of March 31, 2020 and December 31, 2019, we were contingently liable for $13.7 million and $13.9 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 March 31, 2020 and December 31, 2019 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 2029 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1) February 2006 July 2021 Logan, Utah (1) January 2009 August 2024 Irving, Texas (3) December 2013 December 2024 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, this restaurant is owned, in part, by our founder. (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 weeks ended March 31, 2020, we bought most of our beef from three suppliers. We have no material minimum purchase commitments with our vendors that extend beyond a year. 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 adverse effect on us during the periods covered by this report 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | (7) Related Party Transactions As of March 31, 2020 and March 26, 2019, we had six franchise restaurants and one majority-owned company restaurant owned in part by certain officers of the Company. For both of the 13 week periods ended March 31, 2020 and March 26, 2019, these franchise entities paid us fees of $0.3 million. As disclosed in note 6, we are contingently liable on a lease related to one of these franchise restaurants. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
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 restricted stock units from our equity incentive plans. Performance stock units are not included in the diluted earnings per share calculation until the performance-based criteria have been met. For the 13 week period ended March 31, 2020, there were 41,581 shares of nonvested stock, that were outstanding but not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect. For the 13 week period ended March 26, 2019, there were no shares of nonvested stock, that were outstanding but not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect. 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 31, 2020 March 26, 2019 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 16,029 $ 50,390 Basic EPS: Weighted-average common shares outstanding 69,422 71,753 Basic EPS $ 0.23 $ 0.70 Diluted EPS: Weighted-average common shares outstanding 69,422 71,753 Dilutive effect of nonvested stock 430 434 Shares-diluted 69,852 72,187 Diluted EPS $ 0.23 $ 0.70 |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurement | |
Fair Value Measurement | (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 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 31, 2020. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level March 31, 2020 December 31, 2019 Deferred compensation plan—assets 1 $ 35,929 $ 44,623 Deferred compensation plan—liabilities 1 (35,836) (44,679) 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. The following table presents the fair value of our assets measured on a nonrecurring basis: Fair Value Measurements Total gain (loss) March 31, December 31, March 31, Level 2020 2019 2020 Long-lived assets held for use 1 $ — $ 1,684 $ — Operating lease right-of-use assets 3 $ — $ 611 $ (501) Investments in unconsolidated affiliates 3 $ 2,000 $ — $ (528) At March 31, 2020, operating lease right-of-use assets include the lease related assets for one underperforming store that was permanently closed in April 2020 and one store that was relocated during the period. Both of these assets were reduced to a fair value of zero. These assets are valued using a Level 3 input, or the discounted cashflows we expect to receive based on the future operations of this location. This resulted in a loss of million which is included in impairment and closure, net in our unaudited condensed consolidated statements of income and comprehensive income. At December 31, 2019, operating lease right-of-use assets include the lease related assets for the underperforming store noted above. At December 31, 2019, long-lived assets held for use include leasehold improvements for one restaurant that was subject to a forced relocation. This restaurant was relocated in February 2020 at which time the contractually negotiated amount for these assets was received. Investments in unconsolidated affiliates include a 40% equity interest in a China joint venture that was reduced to fair value. This asset is valued using a Level 3 input, or the amount we expect to receive upon the sale of this investment. This resulted in a loss of million which is included in equity income from investments in unconsolidated affiliates in our unaudited condensed consolidated statements of income and comprehensive income. At March 31, 2020 and December 31, 2019, 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. At March 31, 2020, the fair value of our revolving credit facility approximated its carrying value since it is a variable rate credit facility (Level 2). |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation | |
Share-based Compensation | (10) 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 various forms of equity awards including options, stock appreciation rights, full value awards, and performance based awards. The plan replaced the Texas Roadhouse, Inc. 2004 Equity Incentive Plan. The Company provides restricted stock units ("RSUs") to employees as a form of share-based compensation. An RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. In addition to RSUs, the Company provides performance stock units ("PSUs") to executives as a form of share-based compensation. 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 recorded in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended March 31, 2020 March 26, 2019 Labor expense $ 2,388 $ 2,135 General and administrative expense 4,859 6,997 Total share-based compensation expense $ 7,247 $ 9,132 We grant PSUs to certain 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 expense 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. The total intrinsic value of PSUs vested during the 13 week periods ended March 31, 2020 and March 26, 2019 was $3.3 million and $7.2 million, respectively. On January 8, 2020, 95,946 shares vested related to the January 2019 PSU grant and were distributed during the 13 weeks ending March 31, 2020. This included 77,000 granted shares and 18,946 incremental shares due to the grant exceeding the initial 100% target. With respect to unvested PSUs at March 31, 2020, no expense was recognized as we estimate the payout ratio will be zero. As a result, there is no unrecognized compensation cost that is expected to be recognized for the remainder of the year. |
Stock Repurchase Program
Stock Repurchase Program | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity | |
Stock Repurchase Program | (11) Stock Repurchase Program On May 31, 2019, our Board of Directors approved a stock repurchase program under which we may repurchase up to $250.0 million of our common stock. This stock repurchase program has no expiration date and replaced a previous stock repurchase program which was approved on May 22, 2014. All repurchases to date under our stock repurchase programs have been made through open market transactions. The timing and the amount of any repurchases are 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 31, 2020, we paid $12.6 million to repurchase 252,409 shares of our common stock. We did not repurchase any shares of common stock during the 13 week period ended March 26, 2019. On March 17, 2020, we suspended all share repurchase activity. As of March 31, 2020, we had million remaining under our authorized stock repurchase program. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events | |
Subsequent Events | (12) Subsequent Event As discussed in note 3, we are a party to a revolving credit facility under which we may borrow up to $200.0 million with the option to increase by an additional $200.0 million. The revolving credit facility requires us to maintain certain financial covenants. On May 11, 2020, as a precautionary measure and to further enhance our financial flexibility, we amended the revolving credit facility to provide for an incremental revolving credit facility of up to million. This amount would be applied against the additional million that was available under the revolving credit facility. The maturity date for the incremental revolving credit facility is May 10, 2021; however, the maturity date for the original revolving credit facility remains August 5, 2022. The amendment also modifies the financial covenants contained in the revolving credit facility through the end of our Q1 2021 fiscal quarter. We expect that we will be in compliance with the financial covenants, as amended, over the next 12 months. The terms of the amendment require us to pay interest on outstanding borrowings of the original revolving credit facility at LIBOR plus a margin of 1.50% and to pay a commitment fee of 0.25% per year on any unused portion of the revolving credit facility through the end of our Q1 2021 fiscal quarter. The amendment also provides an Alternate Base Rate that may be substituted for LIBOR. As of May 11, 2020, we had based on the pricing per the amendment. The terms of the amendment also require us to pay interest on outstanding borrowings of the incremental revolving credit facility at LIBOR plus a margin of 2.25% and to pay a commitment fee of 0.50% per year on any unused portion of the incremental revolving credit facility through the maturity date. The amendment also provides an Alternate Base Rate that may be substituted for LIBOR. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Financial Instruments | Financial Instruments (Accounting Standards Update 2016-13, "ASU 2016-13") In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Goodwill | Goodwill (Accounting Standards Update 2017-04, "ASU 2017-04") In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, We adopted ASU 2017-04 as of the beginning of our 2020 fiscal year. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. |
Fair Value Measurement | Fair Value Measurement (Accounting Standards Update 2018-13, "ASU 2018-13") In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, value measurements. We adopted ASU 2018-13 as of the beginning of our 2020 fiscal year. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. |
Income Taxes | Income Taxes (Accounting Standards Update 2019-12, "ASU 2019-12") In December 2019. the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions related to the approach for intraperiod tax allocations, the calculation of income taxes in interim periods, and the recognition of deferred taxes for investments. This guidance also simplifies aspects of accounting for recognizing deferred taxes for taxable goodwill. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 (our 2021 fiscal year) and for interim periods within those years, with early adoption permitted. We are currently assessing the impact of this new standard on our consolidated financial statements. |
Reference Rate Reform | Reference Rate Reform (Accounting Standards Update 2020-04, "ASU 2020-04") In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These changes are intended to simplify the market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is effective upon issuance to modifications made as early as the beginning of the interim period through December 31, 2022. We are currently assessing the impact of this new standard on our consolidated financial statements |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue | |
Schedule of disaggregated revenue | 13 weeks ended March 31, 2020 March 26, 2019 Restaurant and other sales $ 647,626 $ 685,117 Franchise royalties 4,287 4,856 Franchise fees 611 635 Total revenue $ 652,524 $ 690,608 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes | |
Schedule of reconciliation of the statutory federal income tax rate to our effective tax rate | 13 Weeks Ended March 31, 2020 March 26, 2019 Tax at statutory federal rate 21.0 % 21.0 % State and local tax, net of federal benefit 3.8 3.6 FICA tip tax credit (33.1) (9.4) Work opportunity tax credit (4.4) (1.4) Stock compensation (0.8) (0.5) Net income attributable to noncontrolling interests (1.2) (0.5) Officers compensation 0.3 1.4 Other 1.7 0.7 Total (12.7) % 14.9 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 2029 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1) February 2006 July 2021 Logan, Utah (1) January 2009 August 2024 Irving, Texas (3) December 2013 December 2024 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, this restaurant is owned, in part, by our founder. (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. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 March 26, 2019 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 16,029 $ 50,390 Basic EPS: Weighted-average common shares outstanding 69,422 71,753 Basic EPS $ 0.23 $ 0.70 Diluted EPS: Weighted-average common shares outstanding 69,422 71,753 Dilutive effect of nonvested stock 430 434 Shares-diluted 69,852 72,187 Diluted EPS $ 0.23 $ 0.70 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurement | |
Schedule of fair values for our financial assets and liabilities measured on a recurring basis | Fair Value Measurements Level March 31, 2020 December 31, 2019 Deferred compensation plan—assets 1 $ 35,929 $ 44,623 Deferred compensation plan—liabilities 1 (35,836) (44,679) |
Schedule of fair value of assets and liabilities measured on a nonrecurring basis | Fair Value Measurements Total gain (loss) March 31, December 31, March 31, Level 2020 2019 2020 Long-lived assets held for use 1 $ — $ 1,684 $ — Operating lease right-of-use assets 3 $ — $ 611 $ (501) Investments in unconsolidated affiliates 3 $ 2,000 $ — $ (528) |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation | |
Summary of allocation of share-based compensation expense | 13 Weeks Ended March 31, 2020 March 26, 2019 Labor expense $ 2,388 $ 2,135 General and administrative expense 4,859 6,997 Total share-based compensation expense $ 7,247 $ 9,132 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)restaurantitem | Mar. 26, 2019restaurantitem | |
Description of Business | ||
Number of states in which restaurants operate | item | 49 | 49 |
Number of countries in which restaurants operate | item | 10 | 10 |
Revolving Credit Facility [Member] | ||
Description of Business | ||
Long-term Line of Credit | $ | $ 190 | |
Company | ||
Description of Business | ||
Number of restaurants | 519 | 495 |
Company | Wholly-owned | ||
Description of Business | ||
Number of restaurants | 499 | 475 |
Company | Majority-owned | ||
Description of Business | ||
Number of restaurants | 20 | 20 |
Franchise | ||
Description of Business | ||
Number of restaurants | 98 | 93 |
Franchise | Domestic | ||
Description of Business | ||
Number of restaurants | 70 | 69 |
Number of restaurants closed | 1 | |
Franchise | International | ||
Description of Business | ||
Number of restaurants | 28 | 24 |
Number of restaurants closed | 22 | |
Franchise | Unconsolidated | Domestic | ||
Description of Business | ||
Number of restaurants | 24 | 24 |
Franchise | Minimum | Unconsolidated | ||
Description of Business | ||
Ownership percentage | 5.00% | 5.00% |
Franchise | Maximum | Unconsolidated | ||
Description of Business | ||
Ownership percentage | 10.00% | 10.00% |
Non-Texas Roadhouse restaurants | Unconsolidated | ||
Description of Business | ||
Number of restaurants | 4 | 4 |
Ownership percentage | 40.00% | 40.00% |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Millions | May 11, 2020 | Aug. 07, 2017 | Mar. 31, 2020 | Dec. 31, 2019 |
Revolving Credit Facility | ||||
Revolving credit facility, remaining borrowing capacity | $ 1.8 | |||
Letters of credit outstanding | 8.2 | |||
Revolving Credit Facility [Member] | ||||
Revolving Credit Facility | ||||
Revolving credit facility, maximum borrowing capacity | $ 200 | 200 | ||
Revolving credit facility contingent increase in maximum borrowing capacity | $ 200 | $ 200 | ||
Weighted-average interest rate (as a percent) | 1.64% | 2.64% | ||
Revolving credit facility, amount outstanding | $ 190 | |||
Revolving Credit Facility [Member] | Subsequent Events. | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 1.50% | |||
Percentage of commitment fee on unused credit facility | 0.25% | |||
Revolving credit facility, amount outstanding | $ 190 | |||
Line Of Credit Facility, Increase In Borrowing Capacity | $ 82.5 | |||
Revolving Credit Facility [Member] | Minimum | ||||
Revolving Credit Facility | ||||
Percentage of commitment fee on unused credit facility | 0.125% | |||
Revolving Credit Facility [Member] | Maximum | ||||
Revolving Credit Facility | ||||
Percentage of commitment fee on unused credit facility | 0.30% | |||
Revolving Credit Facility [Member] | LIBOR | Minimum | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 0.875% | |||
Revolving Credit Facility [Member] | LIBOR | Maximum | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 1.875% | |||
Revolving Credit Facility [Member] | Federal Reserve Bank of New York | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 0.50% | |||
Revolving Credit Facility [Member] | Adjusted Eurodollar Rate | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 1.00% | |||
Interest period | 1 month |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 26, 2019 | |
Revenue | ||
Total revenue | $ 652,524 | $ 690,608 |
Restaurant and other sales | ||
Revenue | ||
Total revenue | 647,626 | 685,117 |
Franchise royalties | ||
Revenue | ||
Total revenue | 4,287 | 4,856 |
Franchise fees | ||
Revenue | ||
Total revenue | $ 611 | $ 635 |
Revenue - Other (Details)
Revenue - Other (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 26, 2019 | Dec. 31, 2019 | |
Revenue | |||
Deferred revenue-gift cards | $ 152,261 | $ 209,258 | |
Gift cards | |||
Revenue | |||
Deferred revenue-gift cards | 152,300 | $ 209,300 | |
Deferred revenue recognized | $ 73,500 | $ 78,300 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 26, 2019 | |
Reconciliation of the statutory federal income tax rate to our effective tax rate: | ||
Tax at statutory federal rate (as a percent) | 21.00% | 21.00% |
State and local tax, net of federal benefit (as a percent) | 3.80% | 3.60% |
FICA tip tax credit (as a percent) | (33.10%) | (9.40%) |
Work opportunity tax credit (as a percent) | (4.40%) | (1.40%) |
Stock compensation (as a percent) | (0.80%) | (0.50%) |
Net income attributable to noncontrolling interests (as a percent) | (1.20%) | (0.50%) |
Officers compensation (as a percent) | 0.30% | 1.40% |
Other (as a percent) | 1.70% | 0.70% |
Total (as a percent) | (12.70%) | 14.90% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)restaurantitem | Dec. 31, 2019USD ($) | |
Commitments and Contingencies | ||
Estimated cost to complete capital project commitments (in dollars) | $ 141.1 | $ 119 |
Number of continuing construction of restaurants. | restaurant | 9 | |
Estimated cost of completion | $ 11.7 | |
Number of suppliers providing most of the company's beef | item | 3 | |
Lease Agreements | ||
Commitments and Contingencies | ||
Number of leases guarantees entity contingently liable | item | 7 | |
Lease Agreements | Maximum | ||
Commitments and Contingencies | ||
Contingently liable amount | $ 13.7 | $ 13.9 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)restaurant | Mar. 26, 2019USD ($)restaurant | |
Franchise | ||
Related Party Transactions | ||
Number of restaurants | 98 | 93 |
Officers, directors and shareholders | Majority-owned | ||
Related Party Transactions | ||
Number of restaurants | 1 | |
Officers, directors and shareholders | Franchise | ||
Related Party Transactions | ||
Number of restaurants | 6 | |
Fees received from franchise and license restaurants | $ | $ 0.3 | $ 0.3 |
Number of restaurants for which the entity is contingently liable on the lease | 1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 26, 2019 | |
Earnings per share | ||
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 16,029 | $ 50,390 |
Basic EPS: | ||
Weighted-average common shares outstanding (in shares) | 69,422,000 | 71,753,000 |
Basic EPS (in dollars per share) | $ 0.23 | $ 0.70 |
Diluted EPS: | ||
Weighted-average common shares outstanding (in shares) | 69,422,000 | 71,753,000 |
Dilutive effect of nonvested stock (in shares) | 430,000 | 434,000 |
Shares-diluted (in shares) | 69,852,000 | 72,187,000 |
Diluted EPS (in dollars per share) | $ 0.23 | $ 0.70 |
Nonvested stock | ||
Antidilutive securities | ||
Anti-dilutive securities (in shares) | 41,581 | 0 |
Fair Value Measurement - Financ
Fair Value Measurement - Financial Assets and Liabilities (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
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 | $ 35,929 | $ 44,623 |
Deferred compensation plan - liabilities | $ (35,836) | $ (44,679) |
Fair Value Measurement - Assets
Fair Value Measurement - Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 26, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Operating lease right-of-use asset, net | $ 512,574 | $ 499,801 | |
Equity (loss) income from investments in unconsolidated affiliates | $ (508) | $ 113 | |
China Joint Venture | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Ownership percentage | 40.00% | ||
Level 1 | Fair value measured on a nonrecurring basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived assets held for use, fair value measurements | 1,684 | ||
Level 3 | Fair value measured on a nonrecurring basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Operating lease right-of-use asset, net | $ 611 | ||
Operating lease right-of-use assets, total gain (loss) | $ (501) | ||
Investments in unconsolidated affiliates, fair value measurements | 2,000 | ||
Equity (loss) income from investments in unconsolidated affiliates | $ (528) |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 26, 2019 | |
Share-based Compensation | ||
Share-based compensation expense | $ 7,247 | $ 9,132 |
Labor expense | ||
Share-based Compensation | ||
Share-based compensation expense | 2,388 | 2,135 |
General and administrative expense | ||
Share-based Compensation | ||
Share-based compensation expense | $ 4,859 | $ 6,997 |
Share-based Compensation, PSU (
Share-based Compensation, PSU (Details) - USD ($) $ in Thousands | Jan. 08, 2019 | Mar. 31, 2020 | Mar. 26, 2019 |
Share-based Compensation | |||
Intrinsic value of awards vested (in dollars) | $ 3,300 | $ 7,200 | |
Expense compensation | $ 7,247 | $ 9,132 | |
PSUs | |||
Share-based Compensation | |||
Vesting period | 1 year | ||
Vested (in shares) | (95,946) | ||
Granted (in shares) | 77,000 | ||
Incremental Performance Shares (in shares) | 18,946 | ||
Target percentage relating to shares granted (as a percent) | 100.00% | ||
Expense compensation | $ 0 | ||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ 0 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | May 31, 2019 | |
Stockholders' Equity | ||
Repurchase of common stock authorized by board of directors | $ 250,000 | |
Payments to repurchase common stock | $ 12,621 | |
Number of shares repurchased | 252,409 | |
Amount remaining under authorized stock repurchase program | $ 147,800 |
Subsequent Events (Details)
Subsequent Events (Details) - Revolving Credit Facility [Member] - USD ($) $ in Millions | May 11, 2020 | Aug. 07, 2017 | Mar. 31, 2020 |
Subsequent Events | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 200 | $ 200 | |
Line of Credit Facility Contingent Increase, Additional Borrowing Capacity | $ 200 | 200 | |
Long-term Line of Credit | $ 190 | ||
Subsequent Events. | |||
Subsequent Events | |||
Line Of Credit Facility, Increase In Borrowing Capacity | $ 82.5 | ||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | ||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | ||
Long-term Line of Credit | $ 190 | ||
Subsequent Events. | Alternate Base Rate [Member] | |||
Subsequent Events | |||
Debt Instrument, Basis Spread on Variable Rate | 2.27% | ||
Subsequent Events. | Incremental Revolving Credit Facility [Member] | |||
Subsequent Events | |||
Line Of Credit Facility, Increase In Borrowing Capacity | $ 82.5 | ||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% | ||
Subsequent Events. | Incremental Revolving Credit Facility [Member] | LIBOR | |||
Subsequent Events | |||
Debt Instrument, Basis Spread on Variable Rate | 2.25% |