Exhibit 99.1
The Cheesecake Factory Reports Record Revenues for the Fiscal Quarter
Ended September 28, 2004
CALABASAS HILLS, Calif.--(BUSINESS WIRE)--Oct. 19, 2004--The
Cheesecake Factory Incorporated (Nasdaq:CAKE) today reported record
revenues for the fiscal third quarter ended September 28, 2004.
Revenues increased 25% to $247.7 million and comparable restaurant
sales increased 2.6% compared to the same quarter of the prior year.
Net income for the quarter was $12.8 million or $0.24 per diluted
share, including a $4.5 million or $0.06 per share reserve established
for pending lawsuits, compared to net income of $14.4 million or $0.28
per diluted share for the same quarter last year. Before the effect of
this reserve, net income per diluted share would have been $0.30 per
share, composed of the $0.24 per share plus the $0.06 per share
related to the reserve.
The reserve was established to accrue for the estimated expenses
that may be incurred in connection with claims alleging failure to
comply with California labor laws with respect to providing employee
meal and rest breaks, as previously disclosed by the Company. This
$4.5 million expense is included in the "other operating expenses"
line in the Company's Consolidated Statements of Operations.
"We are very pleased with our record revenues for the third
quarter, especially considering the severe weather in Florida and
other parts of the Southeast," said David Overton, Chairman and CEO.
"Sales for our comparable restaurants increased 2.6% in spite of an
estimated $1.8 to $2.0 million impact on our total restaurant sales
during the quarter due to the weather. The strength of our brand and
popularity of our concept is clearly demonstrated by our positive
comparable restaurant sales and strong new restaurant openings.
"We expect to achieve our stated goal of opening 16 restaurants in
the current year," stated Overton. Seven new Cheesecake Factory
restaurants were opened in the third quarter and one Cheesecake
Factory restaurant was opened on October 12, bringing the total for
the year to twelve. Two additional Cheesecake Factory restaurants are
expected to open in the fourth quarter. The Company also opened a
Grand Lux Cafe in Dallas during the third quarter and will open an
additional Grand Lux Cafe in Houston during the fourth quarter. "We
are very happy to extend our Grand Lux Cafe concept into Texas and are
pleased with our initial sales from the Dallas location," stated
Overton. "We are excited about the long-term growth potential for the
Grand Lux Cafe as we continue to fine tune the concept's menu,
operations and investment cost."
The Company's current expansion goal for fiscal 2005 is to open as
many as 18 new full-service restaurants, consisting of approximately
15 Cheesecake Factory restaurants and three Grand Lux Cafes. Signed
leases or letters of intent are in-hand for most of the potential 2005
openings.
Bakery sales to other foodservice operators, retailers and
distributors increased 24% to $12.7 million during the third quarter,
compared to the same quarter last year. Sales to warehouse clubs
continue to be very strong and sales of The Dream Factory product line
continue to build.
The Cheesecake Factory Incorporated operates 85 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 $16.09. 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 four upscale casual dining
restaurants under the Grand Lux Cafe(R) name; 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 bakery sales are subject to a number of risks and
uncertainties, including (but not limited to) unforeseen changes in
the purchasing plans of the Company's large-account bakery customers
and inherent difficulties in predicting the timing of product orders
and shipments. Forward-looking statements regarding the number and
timing of the Company's planned new restaurant openings, and the
amount and timing of their associated preopening costs, 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
pending litigation and the potential costs associated with that
litigation are subject to a number of risks and uncertainties,
including interpretations or clarifications of existing laws made by
governmental or judicial bodies. 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)
13 Weeks Ended 13 Weeks Ended
Consolidated Statements of September 28, September 30,
Operations 2004 2003
- ---------------------------------------------------- -----------------
Revenues: Amounts Percents Amounts Percents
----------------------------------
Restaurant sales $235,018 94.9% $187,655 94.9%
Bakery sales to other foodservice
operators, retailers and
distributors 12,665 5.1% 10,177 5.1%
---------------- -----------------
Total revenues 247,683 100.0% 197,832 100.0%
---------------- -----------------
Costs and expenses:
Restaurant cost of sales (1) 58,756 23.7% 45,492 23.0%
Bakery cost of sales (2) 6,405 2.6% 4,664 2.4%
Labor expenses 76,822 31.0% 60,395 30.5%
Other operating expenses 60,799 24.5% 46,487 23.4%
General and administrative
expenses 10,022 4.1% 9,075 4.6%
Depreciation and amortization
expenses 9,034 3.6% 6,975 3.5%
Preopening costs 6,867 2.8% 4,066 2.1%
---------------- -----------------
Total costs and expenses 228,705 92.3% 177,154 89.5%
---------------- -----------------
Income from operations 18,978 7.7% 20,678 10.5%
Interest income, net 605 0.2% 987 0.5%
Other income, net 116 0.1% 665 0.3%
---------------- -----------------
Income before income taxes 19,699 8.0% 22,330 11.3%
Income tax provision 6,915 2.8% 7,972 4.0%
---------------- -----------------
Net income $12,784 5.2% $14,358 7.3%
================ =================
Basic net income per share $0.25 $0.28
========= =========
Basic weighted average shares
outstanding 51,846 50,522
========= =========
Diluted net income per share $0.24 $0.28
========= =========
Diluted weighted average shares
outstanding 52,853 51,900
========= =========
39 Weeks Ended 39 Weeks Ended
Consolidated Statements of September 28, September 30,
Operations 2004 2003
- ---------------------------------------------------- -----------------
Revenues: Amounts Percents Amounts Percents
----------------------------------
Restaurant sales $669,295 95.2% $531,647 95.1%
Bakery sales to other foodservice
operators, retailers and
distributors 33,840 4.8% 27,665 4.9%
---------------- -----------------
Total revenues 703,135 100.0% 559,312 100.0%
---------------- -----------------
Costs and expenses:
Restaurant cost of sales (1) 168,315 23.9% 127,122 22.7%
Bakery cost of sales (2) 17,591 2.5% 12,767 2.3%
Labor expenses 217,514 30.9% 174,557 31.2%
Other operating expenses 163,553 23.3% 129,720 23.2%
General and administrative
expenses 29,660 4.2% 26,859 4.8%
Depreciation and amortization
expenses 25,478 3.6% 20,241 3.6%
Preopening costs 10,935 1.6% 7,368 1.4%
---------------- -----------------
Total costs and expenses 633,046 90.0% 498,634 89.2%
---------------- -----------------
Income from operations 70,089 10.0% 60,678 10.8%
Interest income, net 1,899 0.2% 2,909 0.5%
Other income, net 821 0.1% 2,146 0.4%
---------------- -----------------
Income before income taxes 72,809 10.3% 65,733 11.7%
Income tax provision 25,556 3.6% 23,467 4.1%
---------------- -----------------
Net income $47,253 6.7% $42,266 7.6%
================ =================
Basic net income per share $0.91 $0.84
========= =========
Basic weighted average shares
outstanding 51,687 50,270
========= =========
Diluted net income per share $0.89 $0.82
========= =========
Diluted weighted average shares
outstanding 52,882 51,644
========= =========
Notes:
- -----
(1) Consists of restaurant food, beverage and dessert costs.
(2) Consists of bakery ingredient, packaging and supply costs.
Selected Consolidated Balance Sheet Information September December
28, 30,
2004 2003
- ----------------------------------------------------------------------
Cash and cash equivalents $6,454 $15,167
Investments and marketable securities 115,512 121,840
Total assets 663,152 584,808
Total liabilities 140,666 126,906
Stockholders' equity 522,486 457,902
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
Supplemental Information Sept. 28, Sept. 30, Sept. 28, Sept. 30,
2004 2003 2004 2003
- ---------------------------------------- --------- --------- ---------
Comparable restaurant sales %
change 2.6% 1.8% 4.3% 0.1%
Restaurant cost of sales % of
restaurant sales 25.0% 24.2% 25.1% 23.9%
Bakery cost of sales % of
bakery sales 50.6% 45.8% 52.0% 46.1%
Restaurants opened during
period 8 3 12 7
Restaurants open at period-end 89 70 89 70
Restaurant operating weeks 1,084 884 3,129 2,570
CONTACT: The Cheesecake Factory Incorporated
Jane Vallaire, 818-871-3000