Exhibit 99.1
The Cheesecake Factory Reports Record Net Income and Diluted Net
Income Per Share for the Fiscal Quarter Ended July 1, 2003
CALABASAS HILLS, Calif.--(BUSINESS WIRE)--July 22, 2003--The
Cheesecake Factory Incorporated (Nasdaq:CAKE) today reported record
net income for the fiscal quarter ended July 1, 2003 of $15.3 million
or $0.30 per diluted share, compared to net income of $13.2 million or
$0.26 per diluted share for the same quarter last year.
"We were pleased with our solid financial results for the second
quarter," said David Overton, Chairman and CEO. "Comparable restaurant
sales increased 0.3% during the second quarter. Our restaurants have
achieved positive quarterly comparable sales comparisons during 43 of
the 44 quarters that our Company has been publicly held, and we are
very proud of that enviable track record for our industry. This is a
strong testament to the sustained popularity of our restaurants and
the sustained ability of our restaurant management teams to correctly
execute our concepts. Additionally, our restaurant operators did a
commendable job of managing controllable costs and expenses during the
second quarter, as did our bakery production operations."
The Company remains on target to open as many as 14 new Cheesecake
Factory restaurants during fiscal 2003. "As we originally planned,
four new restaurants have opened so far this fiscal year," said
Overton. "We previously announced that as many as ten additional
restaurants are planned for openings during August-December 2003, and
we are operationally ready to successfully execute those openings. Due
to the nature of the leased spaces that we select for our restaurants
and their highly customized layouts, it is not possible for us to
precisely predict, by quarter, the exact timing of our restaurant
openings and their associated preopening costs. Having said that, we
remain committed to opening as many as ten additional restaurants
during the rest of this year and thereby increasing our total
restaurant productive square feet for the full year by approximately
23%.
"Several of our recent restaurant openings have set new opening
sales records for our Company," commented Overton. "Our newer
locations in St. Louis, MO, San Jose, CA, Edison, NJ, Charlotte, NC,
West Nyack, NY and Overland Park, KS have all opened with average
sales volumes well in excess of our Company average. We believe that
most of these locations have the potential to sustain
higher-than-average sales volumes once their "honeymoon" grand opening
periods are completed. And, we are very excited about the strong sales
potential for our remaining restaurant openings planned for this year,
including a unique location next to the Royal Hawaiian Hotel on
Waikiki Beach in Honolulu."
Sales continued to build at all three of the Company's Grand Lux
Cafe restaurants during the second quarter of fiscal 2003. "Compared
to the same quarter last year, sales for our Las Vegas and Los Angeles
locations each increased approximately 7% during the second quarter,"
said Overton. "Sales for our downtown Chicago location continue to
annualize in excess of $10 million. We currently plan to open as many
as two additional Grand Lux Cafes during fiscal 2004, and we continue
to be excited about the longer-term growth potential of the concept."
Bakery sales to other foodservice operators, retailers and
distributors were $9.8 million for the fiscal quarter ended July 1,
2003, which was very close to the Company's expected range of $10
million for the quarter. "While bakery sales are inherently difficult
to forecast due to a variety of factors, we currently expect that
absolute bakery sales for the upcoming third quarter should be in the
range of $10-$12 million," commented Overton. "Sales to SYSCO
Corporation continue to gradually build in line with our expectations,
and we continue to work on other sales-building initiatives with both
existing and new customers."
The Company currently plans to release financial results for the
fiscal quarter ending September 30, 2003 after the market closes on
October 21, 2003. An investor conference call will be held at 5:00 PM
Eastern Time on that day. The investor conference call will be
broadcast live over the Internet at www.thecheesecakefactory.com.
Listeners should select the "Audio Webcasts" option under the
"Investor" section of the Company's website. An archived webcast will
also be available.
The Cheesecake Factory Incorporated operates 63 upscale, casual
dining restaurants under The Cheesecake Factory(R) name that offer an
extensive menu of more than 200 items with an average check of
approximately $15.78. The Company also operates a bakery production
facility that produces over 50 varieties of quality cheesecakes and
other baked products for the Company's restaurants and for other
leading foodservice operators, retailers and distributors.
Additionally, the Company operates three upscale casual dining
restaurants under the Grand Lux Cafe(R) name in Los Angeles, Chicago
and Las Vegas; one self-service, limited menu "express" foodservice
operation under The Cheesecake Factory Express(R) mark inside the
DisneyQuest(R) family entertainment center in Orlando, Florida; and
licenses three bakery cafe outlets to another foodservice operator
under The Cheesecake Factory Bakery Cafe(R) name.
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or
implied by forward-looking statements. Investors are cautioned that
forward-looking statements are not guarantees of future performance
and that undue reliance should not be placed on such statements. In
particular, forward-looking statements regarding the Company's
restaurant sales trends are subject to risks and uncertainties due to
national and regional economic and public safety conditions that
impact consumer confidence and spending, as well as weather and other
factors outside of the Company's control. Forward-looking statements
regarding the number and timing of the Company's planned new
restaurant openings are subject to risks and uncertainties due to
factors outside of the Company's control, including factors that are
under the control of government agencies, landlords and others.
Forward-looking statements regarding bakery sales are subject to a
number of risks and uncertainties, including (but not limited to) the
purchasing plans of the Company's large-account bakery customers and
the Company's ability to obtain and retain such customers.
Forward-looking statements speak only as of the dates on which they
were made. The Company undertakes no obligation to publicly update or
revise any forward-looking statements or to make any other
forward-looking statements, whether as a result of new information,
future events or otherwise unless required to do so by the securities
laws. Investors are referred to the full discussion of risks and
uncertainties associated with forward-looking statements contained in
the Company's filings with the Securities and Exchange Commission.
The Cheesecake Factory Incorporated and Subsidiaries
Consolidated Financial Statements
(unaudited; in thousands, except per share and statistical data)
Consolidated Statements of 13 Weeks Ended 13 Weeks Ended
Operations July 1, 2003 July 2, 2002
- ----------------------------------------------------------------------
Revenues: Amounts Percents Amounts Percents
------- -------- -------- --------
Restaurant sales $178,816 94.8% $151,203 91.4%
Bakery sales to other
foodservice operators,
retailers and distributors 9,804 5.2% 14,157 8.6%
Total revenues 188,620 100.0% 165,360 100.0%
Costs and expenses:
Restaurant cost of sales (1) 42,785 22.7% 35,991 21.8%
Bakery cost of sales (2) 4,465 2.4% 6,725 4.1%
Labor expenses 58,318 30.9% 50,681 30.6%
Other operating expenses 43,456 23.0% 36,683 22.2%
General and administrative
expenses 9,098 4.8% 8,314 5.0%
Depreciation and
amortization expenses 6,720 3.6% 5,532 3.3%
Preopening costs 1,784 0.9% 2,247 1.4%
Total costs and expenses 166,626 88.3% 146,173 88.4%
Income from operations 21,994 11.7% 19,187 11.6%
Interest income, net 1,065 0.6% 994 0.6%
Other income, net 687 0.3% 423 0.3%
Income before income taxes 23,746 12.6% 20,604 12.5%
Income tax provision 8,477 4.5% 7,356 4.5%
Net income $15,269 8.1% $13,248 8.0%
Basic net income per share $0.30 $0.27
Basic weighted average shares
outstanding 50,287 48,898
Diluted net income per share $0.30 $0.26
Diluted weighted average
shares outstanding 51,665 50,915
Consolidated Statements of 26 Weeks Ended 26 Weeks Ended
Operations July 1, 2003 July 2, 2002
- ----------------------------------------------------------------------
Revenues: Amounts Percents Amounts Percents
------- -------- ------- --------
Restaurant sales $343,992 95.2% $288,840 91.5%
Bakery sales to other
foodservice operators,
retailers and distributors 17,488 4.8% 26,754 8.5%
Total revenues 361,480 100.0% 315,594 100.0%
Costs and expenses:
Restaurant cost of sales (1) 81,629 22.6% 69,411 22.0%
Bakery cost of sales (2) 8,104 2.2% 12,806 4.1%
Labor expenses 114,162 31.6% 96,943 30.7%
Other operating expenses 83,233 23.0% 70,708 22.4%
General and administrative
expenses 17,784 4.9% 15,873 5.0%
Depreciation and
amortization expenses 13,266 3.7% 10,711 3.4%
Preopening costs 3,302 0.9% 4,931 1.6%
Total costs and expenses 321,480 88.9% 281,383 89.2%
Income from operations 40,000 11.1% 34,211 10.8%
Interest income, net 1,922 0.5% 1,990 0.6%
Other income, net 1,481 0.4% 834 0.3%
Income before income taxes 43,403 12.0% 37,035 11.7%
Income tax provision 15,495 4.3% 13,221 4.2%
Net income $27,908 7.7% $23,814 7.5%
Basic net income per share $0.56 $0.49
Basic weighted average shares
outstanding 50,160 48,832
Diluted net income per share $0.54 $0.47
Diluted weighted average
shares outstanding 51,538 51,069
Notes:
(1) Consists of restaurant food, beverage and dessert costs.
(2) Consists of bakery ingredient, packaging and supply costs.
Selected Consolidated Balance Sheet
Information July 1, 2003 December 31, 2002
- ------------------------------------- ------------- -----------------
Cash and cash equivalents $5,302 $11,033
Investments and marketable securities 121,653 103,453
Total assets 506,509 463,842
Total liabilities 92,231 84,278
Stockholders' equity 414,278 379,564
13 Weeks 13 Weeks 26 Weeks 26 Weeks
Ended Ended Ended Ended
July 1, July 2, July 1, July 2,
Supplemental Information 2003 2002 2003 2002
- ------------------------------- -------- -------- -------- --------
Comparable restaurant sales %
change 0.3% 1.6% -0.8% 1.8%
Restaurant cost of sales % of
restaurant sales 23.9% 23.8% 23.7% 24.0%
Bakery cost of sales % of bakery
sales 45.5% 47.5% 46.3% 47.9%
Restaurants opened during period 2 1 4 4
Restaurants open at period-end 67 55 67 55
Restaurant operating weeks 851 712 1,686 1,389
CONTACT: The Cheesecake Factory Incorporated
Jane Vallaire, 818-871-3000