Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced
financial results for the 13 week period ended March 29, 2016.
First Quarter ($000's)
2016
2015
% Change
Total revenue $ 515,559 $ 460,230 12 Income from operations
52,811 48,600 9 Net income 35,593 32,292 10 Diluted EPS $ 0.50 $
0.46 10
Results for the first quarter included the following
highlights:
- Comparable restaurant sales growth of
4.6% at company restaurants and 3.1% at franchise restaurants;
- Restaurant margin, as a percentage of
restaurant sales, increased 116 basis points to 20.1%, primarily
driven by lower food costs;
- Diluted earnings per share increased
9.8% to $0.50 from $0.46 in the prior year;
- The Company recorded a pre-tax charge
of $5.5 million ($3.4 million after-tax) related to a pending legal
settlement which had a $0.05 impact on diluted earnings per share
and a 10.0% impact on diluted earnings per share growth;
- Seven company-owned restaurants were
opened, including two Bubba’s 33 restaurants; and,
- The Company repurchased 114,700 shares
of its common stock for $4.1 million.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc.,
commented, "We are pleased that our top-line momentum continued in
the first quarter, driven by solid traffic growth. Strong comp
sales, along with commodity deflation driven by lower beef costs
helped us deliver near double digit earnings growth this quarter.
As of today, we have opened ten company restaurants, as well as two
international franchise openings, including our first in the
Philippines. Beyond restaurant development, our balance sheet and
cash flow remain healthy and we believe we are well-positioned for
long-term growth."
2016 Outlook
The Company reported that comparable restaurant sales growth at
company restaurants for the first four weeks of its second quarter
of fiscal 2016 was approximately 5.1% compared to the prior year
period.
Management reiterated the following expectations for 2016:
- Positive comparable restaurant sales
growth;
- 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.
Conference Call
The Company is hosting a conference call today, May 2, 2016 at
5:00 p.m. Eastern Time to discuss these results. The dial-in number
is (877) 675-4756 or (719) 325-4940 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 4379719 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 495 restaurants system-wide in 49 states
and five 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 March 29,
2016 March 31, 2015 Revenue: Restaurant sales $
511,284 $ 456,293 Franchise royalties and fees 4,275
3,937 Total revenue 515,559 460,230
Costs and expenses: Restaurant operating costs (excluding
depreciation and amortization shown separately below): Cost
of sales 173,128 159,980 Labor 147,546 131,404 Rent 10,027 8,979
Other operating 77,612 69,317 Pre-opening 4,825 3,818 Depreciation
and amortization 19,539 16,335 Impairment and closure 11 - General
and administrative 30,060 21,797 Total costs
and expenses 462,748 411,630 Income from
operations 52,811 48,600 Interest expense, net 305 515
Equity income from investments in
unconsolidated affiliates
352 372 Income before taxes 52,858 48,457
Provision for income taxes 15,857 14,876 Net
income including noncontrolling interests $ 37,001 $ 33,581 Less:
Net income attributable to noncontrolling interests 1,408
1,289 Net income attributable to Texas Roadhouse, Inc. and
subsidiaries $ 35,593 $ 32,292
Net income per common share attributable
to Texas Roadhouse, Inc. and subsidiaries:
Basic $ 0.51 $ 0.46 Diluted $ 0.50 $ 0.46 Weighted average
shares outstanding: Basic 70,169 69,841 Diluted
70,764 70,528
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (in thousands)
(unaudited) March 29,
2016 December 29, 2015 Cash and cash equivalents $
95,992 $ 59,334 Other current assets 51,218 74,479 Property and
equipment, net 766,331 751,288 Goodwill 116,571 116,571 Intangible
assets, net 4,488 4,827 Other assets 27,014 26,207
Total assets $ 1,061,614 $ 1,032,706 Current
maturities of long-term debt 147 144 Other current liabilities
233,097 256,498 Long-term debt, excluding current maturities 50,512
25,550 Other liabilities 78,566 73,332 Texas Roadhouse, Inc. and
subsidiaries stockholders' equity 691,537 669,662 Noncontrolling
interests 7,755 7,520 Total liabilities and equity $
1,061,614 $ 1,032,706
Texas Roadhouse, Inc. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (in thousands)
(unaudited)
13 Weeks Ended March 29, 2016 March 31, 2015
Cash
flows from operating activities: Net income including
noncontrolling interests $ 37,001 $ 33,581 Adjustments to reconcile
net income to net cash provided by operating activities
Depreciation and amortization 19,539 16,335 Share-based
compensation expense 5,788 4,904 Other noncash adjustments 802 (41
) Change in working capital 1,758 2,913
Net cash provided by operating activities 64,888
57,692
Cash flows from investing
activities: Capital expenditures - property and equipment
(34,179 ) (33,437 ) Proceeds from sale of property and equipment,
including insurance proceeds - 9 Net
cash used in investing activities (34,179 ) (33,428 )
Cash flows from financing activities: Proceeds from
revolving credit facility 25,000 - Repurchase shares of common
stock (4,110 ) - Dividends paid (11,919 ) (10,443 ) Other financing
activities (3,022 ) (1,431 ) Net cash provided by
(used in) financing activities 5,949 (11,874 )
Net increase in cash and cash equivalents 36,658 12,390 Cash
and cash equivalents - beginning of period 59,334
86,122 Cash and cash equivalents - end of period $
95,992 $ 98,512
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information ($
amounts in thousands, except weekly sales by group)
(unaudited) First
Quarter Change
2016
2015
vs LY
Restaurant openings Company - Texas Roadhouse 5 2 3 Company
- Bubba's 33 2 1 1 Company - Other 0 0 0 Franchise - Texas
Roadhouse 1 0 1 Total 8 3 5 Restaurants open at the end of
the quarter Company - Texas Roadhouse 397 370 27 Company - Bubba's
33 9 4 5 Company - Other 2 1 1 Franchise - Texas Roadhouse 83 79 4
Total 491 454 37 Company-owned restaurants Restaurant sales
$ 511,284 $ 456,293 12.1
%
Store weeks 5,262 4,857 8.3
%
Comparable restaurant sales growth (1) 4.6 % 8.9 % Texas Roadhouse
restaurants only: Comparable restaurant sales growth (1) 4.6 % 8.8
% Average unit volume (2) $ 1,270 $ 1,220 4.1
%
Weekly sales by group: Comparable restaurants (358 units) $ 98,156
Average unit volume restaurants (18 units) (3) $ 88,094 Restaurants
less than 6 months old (21 units) $ 98,583 Restaurant
operating costs (as a % of restaurant sales) Cost of sales 33.9 %
35.1 % (120 ) bps Labor 28.9 % 28.8 % 6 bps Rent 2.0 % 2.0 % (1 )
bps Other operating 15.2 % 15.2 % (1 ) bps Total 79.9 % 81.0 % (116
) bps Restaurant margin (4) 20.1 % 19.0 % 116 bps
Restaurant margin ($ in thousands) $ 102,970 $ 86,613 18.9
%
Restaurant margin $/Store week $ 19,569 $ 17,833 9.7
%
Franchise-owned restaurants Franchise royalties and fees $
4,275 $ 3,937 8.6
%
Store weeks 1,070 1,027 4.2
%
Comparable restaurant sales growth (1) 3.1 % 8.0 % Average unit
volume (2) $ 1,317 $ 1,306 0.8
%
Pre-opening expense $ 4,825 $ 3,818 26.4
%
Depreciation and amortization $ 19,539 $ 16,335 19.6
%
As a % of revenue 3.8 % 3.5 % 24 bps General and
administrative expenses $ 30,060 $ 21,797 37.9
%
As a % of revenue 5.8 % 4.7 % 109 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 any sales at restaurants closed during
the period. (3) Average unit volume restaurants include 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20160502006143/en/
Texas Roadhouse, Inc.Investor Relations:Tonya Robinson,
502-515-7269orMedia:Travis Doster, 502-638-5457
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