TXRH Texas Roadhouse Inc

Increases Quarterly Dividend 12% to $0.19 per Share

Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 week periods ended December 29, 2015.

      Fourth Quarter       Year to Date ($000's)

2015

   

2014

   

% Change

2015

   

2014

   

% Change

  Total revenue $ 454,351 $ 404,425 12 $ 1,807,368 $ 1,582,148 14 Income from operations 33,713 27,043 25 144,565 130,449 11 Net income 22,982 18,595 24 96,894 87,022 11 Diluted EPS $ 0.32 $ 0.26 23 $ 1.37 $ 1.23 11  

Results for the fourth quarter included the following highlights:

• Comparable restaurant sales growth of 4.5% at company restaurants and 4.0% at franchise restaurants;
• Restaurant margin, as a percentage of restaurant sales, increased 112 basis points to 17.6%, primarily driven by lower other operating costs and lower food costs;
• Diluted earnings per share increased 22.7% to $0.32 from $0.26 in the prior year;
• Seven company-owned Texas Roadhouse restaurants were opened; and,
• The Company repurchased 189,700 shares of its common stock for $6.7 million.

Results for the full year included the following highlights:

• Comparable restaurant sales growth of 7.2% at company restaurants and 6.5% at franchise restaurants;
• Restaurant margin, as a percentage of restaurant sales, decreased 30 basis points to 17.3%. Food cost inflation of approximately 4.9%, driven by beef, more than offset the impact of higher average unit volume;
• Diluted earnings per share increased 11.1% to $1.37 from $1.23 in the prior year;
• 29 company-owned restaurants were opened, including four Bubba's 33 restaurants; and,
• The Company repurchased 321,789 shares of its common stock for $11.4 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We ended the year on a strong note, with double digit revenue and diluted earnings per share growth for both the fourth quarter and the full year. This represents our 24th consecutive quarter of positive comparable restaurant sales growth, which is a testament to our Managing Partners. In addition, our solid balance sheet and healthy cash flow allowed us to open 29 restaurants, while returning $58 million of excess capital to shareholders through quarterly dividend payments and share repurchases throughout the year."

Taylor continued, "We have assembled a substantial pipeline of new locations and are on track to open approximately 30 company restaurants this year. Our top-line momentum has continued into 2016 and we are pleased to have seen continued traffic growth during the first seven weeks of the year. Looking ahead, we will stay focused on solidifying our long-term brand position and capitalizing on our growth potential."

2016 Outlook

The Company reported that comparable restaurant sales growth of at company restaurants for the first seven weeks of its first quarter of fiscal 2016 was approximately 4.4% compared to the prior year period.

Management updated the following expectations for 2016:

• Approximately 30 company restaurant openings, including approximately seven Bubba’s 33 restaurants;
• 1.0% to 2.0% food cost deflation;
• An income tax rate of approximately 30.0%; and,
• Total capital expenditures of $165.0 million to $175.0 million.

Management reiterated the expectation of positive comparable restaurant sales growth for 2016.

Cash Dividend Payment

On February 19, 2016, the Company’s Board of Directors authorized the payment of a quarterly cash dividend of $0.19 per share of common stock. This payment, which will be distributed on April 1, 2016 to shareholders of record at the close of business on March 16, 2016, represents a 12% increase from the cash dividend of $0.17 per share of common stock declared during each quarter of 2015 and represents our fifth consecutive year of dividend payments.

Conference Call

The Company is hosting a conference call today, February 22, 2016 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 874-1571 or (719) 325-4839 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (877) 870-5176 or (858) 384-5517 for international calls, and use 1297446 as the pass code. There will be a simultaneous Web cast conducted at www.texasroadhouse.com.

About the Company

Texas Roadhouse is a casual dining concept that first opened in 1993 and today operates over 485 restaurants system-wide in 49 states and four foreign countries. For more information, please visit the Company’s Web site at www.texasroadhouse.com.

Forward-looking Statements

Certain statements in this release that are not historical facts, including, without limitation, those relating to our anticipated financial performance, are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of the management of the Company. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the actual number of restaurants opening; the sales at these and our other company and franchise restaurants; changes in restaurant development or operating costs, such as food and labor; our ability to acquire franchise restaurants; our ability to integrate the franchise restaurants we acquire or other concepts we develop; our ability to continue to generate the necessary cash flows to fund our new restaurant growth, continue our share repurchase program and pay a quarterly cash dividend; strength of consumer spending; pending or future legal claims; breaches of security; conditions beyond our control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customers or food supplies; food safety and food borne illness concerns; acts of war or terrorism and other factors disclosed from time to time in our filings with the U.S. Securities and Exchange Commission. Investors should take such risks into account when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update any forward-looking statements.

          Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Statements of Income (in thousands, except per share data) (unaudited)                         13 Weeks Ended 52 Weeks Ended

December 29,

2015

December 30,

2014

December 29,

2015

December 30,

2014

  Revenue: Restaurant sales $ 450,529 $ 400,790 $ 1,791,446 $ 1,568,556 Franchise royalties and fees   3,822   3,635   15,922   13,592   Total revenue   454,351   404,425   1,807,368   1,582,148   Costs and expenses: Restaurant operating costs (excluding depreciation and amortization shown separately below):   Cost of sales 159,301 143,592 644,001 553,144 Labor 131,517 116,744 524,203 459,119 Rent 9,741 8,624 37,183 33,174 Other operating 70,773 65,848 275,296 246,339 Pre-opening 4,640 5,775 19,116 18,452 Depreciation and amortization 18,700 15,497 69,694 59,179 Impairment and closure 974 626 974 636 General and administrative   24,992   20,676   92,336   81,656   Total costs and expenses   420,638   377,382   1,662,803   1,451,699   Income from operations 33,713 27,043 144,565 130,449   Interest expense, net 479 520 1,959 2,084

Equity income from investments in unconsolidated affiliates

  353   627   1,641   1,602   Income before taxes 33,587 27,150 144,247 129,967 Provision for income taxes   9,567   7,528   42,986   38,990   Net income including noncontrolling interests $ 24,020 $ 19,622 $ 101,261 $ 90,977 Less: Net income attributable to noncontrolling interests   1,038   1,027   4,367   3,955 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 22,982 $ 18,595 $ 96,894 $ 87,022  

Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:

Basic $ 0.33 $ 0.27 $ 1.38 $ 1.25 Diluted $ 0.32 $ 0.26 $ 1.37 $ 1.23   Weighted average shares outstanding: Basic   70,143   69,500   70,032   69,719 Diluted   70,865   70,359   70,747   70,608             Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (unaudited)            

December 29,

2015

December 30,

2014

    Cash and cash equivalents $ 59,334 $ 86,122 Other current assets

74,479

61,604 Property and equipment, net 751,288 649,637 Goodwill 116,571 116,571 Intangible assets, net 4,827 6,203 Other assets 26,207 23,005     Total assets $

1,032,706

$ 943,142     Current maturities of long-term debt 144 129 Other current liabilities

256,498

215,842 Long-term debt, excluding current maturities 25,550 50,693 Other liabilities 73,332 61,522 Texas Roadhouse, Inc. and subsidiaries stockholders' equity 669,662 607,892 Noncontrolling interests 7,520 7,064     Total liabilities and equity $

1,032,706

$ 943,142             Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)           52 Weeks Ended December 29, 2015     December 30, 2014     Cash flows from operating activities: Net income including noncontrolling interests $ 101,261 $ 90,977 Adjustments to reconcile net income to net cash provided by operating activities   Depreciation and amortization 69,694 59,179 Share-based compensation expense 22,825 14,883 Other noncash adjustments 5,697 4,078 Change in working capital   28,464     22,596     Net cash provided by operating activities   227,941     191,713     Cash flows from investing activities: Capital expenditures - property and equipment (173,475 ) (125,445 ) Proceeds from sale of property and equipment, including insurance proceeds   272     1,205   Net cash used in investing activities   (173,203 )   (124,240 )   Cash flows from financing activities: Repayments of revolving credit facility (25,000 ) - Repurchase shares of common stock (11,397 ) (42,744 ) Dividends paid (46,176 ) (31,333 ) Other financing activities   1,047     (2,148 ) Net cash used in financing activities   (81,526 )   (76,225 )   Net decrease in cash and cash equivalents (26,788 ) (8,752 ) Cash and cash equivalents - beginning of period   86,122     94,874   Cash and cash equivalents - end of period $ 59,334   $ 86,122               Texas Roadhouse, Inc. and Subsidiaries Supplemental Financial and Operating Information ($ amounts in thousands, except weekly sales by group) (unaudited)               Fourth Quarter     Change     Year to Date     Change

2015

   

2014

vs LY

2015

   

2014

vs LY

  Restaurant openings Company - Texas Roadhouse 7 7 0 24 22 2 Company - Bubba's 33 0 2 (2 ) 4 2 2 Company - Other 0 1 (1 ) 1 1 0 Franchise - Texas Roadhouse 1 5 (4 ) 3 6 (3 ) Total 8 15 (7 ) 32 31 1   Restaurant acquisitions/dispositions Company - Texas Roadhouse 0 1 (1 ) 0 1 (1 ) Company - Bubba's 33 0 0 0 0 0 0 Company - Other 0 0 0 0 0 0 Franchise - Texas Roadhouse 0 (1 ) 1 0 (1 ) 1 Total 0 0 0 0 0 0   Restaurants open at the end of the quarter Company - Texas Roadhouse 392 368 24 Company - Bubba's 33 7 3 4 Company - Other 2 1 1 Franchise - Texas Roadhouse 82 79 3 Total 483 451 32   Company-owned restaurants Restaurant sales $ 450,529 $ 400,790 12.4 % $ 1,791,446 $ 1,568,556 14.2 % Store weeks 5,186 4,766 8.8 % 20,020 18,565 7.8 % Comparable restaurant sales growth (1) 4.5 % 7.0 % 7.2 % 4.7 % Texas Roadhouse restaurants only: Comparable restaurant sales growth (1) 4.5 % 7.0 % 7.2 % 4.7 % Average unit volume (2) $ 1,130 $ 1,083 4.3 % $ 4,664 $ 4,351 7.2 % Weekly sales by group: Comparable restaurants (352 units) $ 87,038 Average unit volume restaurants (18 units) (3) $ 84,218 Restaurants less than 6 months old (22 units) $ 94,410   Restaurant operating costs (as a % of restaurant sales) Cost of sales 35.4 % 35.8 % (47)bps 35.9 % 35.3 % 68bps Labor 29.2 % 29.1 % 6bps 29.3 % 29.3 % (1)bps Rent 2.2 % 2.2 % 1bps 2.1 % 2.1 % (4)bps Other operating 15.7 % 16.4 % (72)bps 15.4 % 15.7 % (34)bps Total 82.4 % 83.5 % (112)bps 82.7 % 82.4 % 30bps   Restaurant margin (4) 17.6 % 16.5 % 112bps 17.3 % 17.6 % (30)bps   Restaurant margin ($ in thousands) $ 79,196 $ 65,982 20.0 % $ 310,762 $ 276,782 12.3 % Restaurant margin $/Store week $ 15,272 $ 13,844 10.3 % $ 15,523 $ 14,909 4.1 %   Franchise-owned restaurants Franchise royalties and fees $ 3,822 $ 3,635 5.1 % $ 15,922 $ 13,592 17.1 % Store weeks 1,062 998 6.4 % 4,174 3,910 6.8 % Comparable restaurant sales growth (1) 4.0 % 5.7 % 6.5 % 4.9 % Average unit volume (2) $ 1,202 $ 1,175 2.3 % $ 5,029 $ 4,639 8.4 %   Pre-opening expense $ 4,640 $ 5,775 (19.7 )% $ 19,116 $ 18,452 3.6 %   Depreciation and amortization $ 18,700 $ 15,497 20.7 % $ 69,694 $ 59,179 17.8 % As a % of revenue 4.1 % 3.8 % 28bps 3.9 % 3.7 % 12bps   General and administrative expenses $ 24,992 $ 20,676 20.9 % $ 92,336 $ 81,656 13.1 % As a % of revenue 5.5 % 5.1 % 39bps 5.1 % 5.2 % (5)bps   (1) Comparable restaurant sales growth reflects the change in year-over-year sales for restaurants open a full 18 months before the beginning of the period measured, excluding sales from restaurants closed during the period. (2) Average unit volume includes sales from Texas Roadhouse restaurants open for a full six months before the beginning of the period measured, excluding sales from restaurants closed during the period. (3) Average unit volume restaurants include Texas Roadhouse restaurants open a full six to 18 months before the beginning of the period measured. (4) Restaurant margin represents restaurant sales less cost of sales, labor, rent and other operating costs (as a percentage of restaurant sales). Restaurant margin is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. Restaurant margin is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to income from operations or other similarly titled measures of other companies.   Amounts may not foot due to rounding.        

View source version on businesswire.com: http://www.businesswire.com/news/home/20160222006541/en/

Texas Roadhouse, Inc.Investor Relations:Tonya Robinson, 502-515-7269orMedia:Travis Doster, 502-638-5457